Stock markets diverged Thursday as optimism over the Federal Reserve's latest interest rate cut was dampened by disappointing earnings from software giant Oracle, which revived concerns over sky-high AI valuations.

On Wall Street the blue-chip Dow edged higher at the open of trading, while the S&P 500 and Nasdaq Composite both slid lower.

Major European indices gained in afternoon trading, after Asian markets finished mixed.

The Fed delivered its third straight cut to borrowing costs on Wednesday, but signalled that it could hold off further reductions in the coming months.

"Even as investors were reassured by the Fed's latest rate cut, familiar concerns about AI are still very much top of mind right now," said Deutsche Bank managing director Jim Reid.

Those concerns were reignited af

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