Stock futures traded near flat levels Friday as investors prepared for the release of August personal consumption expenditures data. According to CNBC, S&P 500 futures were unchanged while Nasdaq 100 futures declined 0.1%. Futures tied to the Dow Jones Industrial Average gained 59 points or 0.1%.

Oracle shares fell 0.8% in premarket trading, extending losses for a fourth consecutive day. The database software company has dropped 5.6% this week as investors question the sustainability of artificial intelligence valuations. Markets also reacted to fresh tariff announcements from President Trump, who declared new duties on pharmaceuticals, heavy trucks, and furniture starting October 1.

Investors await the PCE price index release at 8:30 a.m. ET Friday. Economists expect the print to show inflation rising 0.3% monthly and 2.7% annually. The data represents the Federal Reserve's preferred inflation measure and could influence future rate cut decisions.

Trump Tariffs Send Ripples Through Global Markets

President Trump announced sweeping new tariffs Thursday evening that immediately affected global markets. According to Bloomberg, pharmaceutical imports face 100% duties unless companies build manufacturing plants in America. Heavy trucks will face 25% tariffs while kitchen cabinets and furniture imports encounter 30% to 50% duties.

The pharmaceutical tariff announcement sent Asian drug stocks tumbling Friday morning. Companies including Daiichi Sankyo fell 2.11% while Chugai Pharmaceutical dropped 3.64%. The measures affect an estimated $233 billion in annual pharmaceutical imports to the United States.

Trump justified the moves as necessary to protect national security and domestic manufacturing. The tariffs take effect October 1 and represent the latest expansion of his trade policy agenda. Truck manufacturer Paccar jumped 6% following the announcement as investors anticipated reduced foreign competition.

AI Investment Reality Check Spreads Beyond Oracle

Oracle's recent decline reflects broader skepticism about artificial intelligence valuations across the technology sector. FinancialContent reports that Rothschild & Redburn initiated coverage of Oracle with a sell rating and $175 price target. The analyst warned that markets "materially overestimate" Oracle's contracted cloud revenues.

Oracle reached a record high of $328.33 on September 19 after reporting massive AI infrastructure contracts worth $455 billion in remaining performance obligations. However, the stock has fallen nearly 16% from its peak as investors demand proof of sustainable profitability rather than just growth potential.

The concerns extend to other AI leaders including Nvidia and Meta, which also declined Thursday. Analysts suggest the market is transitioning from valuing AI potential to requiring tangible execution and returns. This shift reflects growing caution about record-high valuations and circular relationships within the AI industry ecosystem.

Further Reading

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