AI Fears Eclipse Fed Rate Hopes. Why Oracle Earnings Should Concern Stock Markets and 5 Other Things to Know Today.

While markets got what they wanted from Federal Reserve Chair Jerome Powell on Wednesday, it was Oracle executives who seemed to have more sway on the market.

As was widely expected, the Fed cut interest rates by a quarter of a point. Powell flagged concerns about the labor market in his post-decision comments, cementing hopes that borrowing costs will fall further next year. The Dow Jones Industrial Average rallied 498 points for its best Fed Day since December 2023.

But the buoyant mood evaporated following Oracle’s second-quarter results. Earnings for the period topped analysts’ expectations—but the software company also raised its spending forecast, fueling fears that it plans to plow too much money into building data centers for artificial intelligence.

Oracle has a $523 billion revenue backlog which is impressive on the face of it. But $300 billion of that comes from a contract with ChatGPT-developer OpenAI —a loss-making start-up that doesn’t have $300 billion, and may struggle to raise it.

It’s a reminder that the Fed and AI are the only two things investors care about right now—and with stocks trading close to record highs, investors need perfection on both fronts for the market to maintain its momentum into 2026.

Chip maker Broadcom’s earnings, due after Thursday’s close, will be the next big event. Even a stellar fourth quarter might not reassure the market, as a surge in chip sales could add to worries that Oracle and its free-spending peers are inflating an AI bubble.

Powell added to the festive cheer on Wednesday, but any concerns about Oracle or Broadcom could scuttle any hopes of a Santa rally.

—George Glover

***What’s Ahead for Markets in 2026? From “Liberation Day” tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us today at noon for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026—and how to position your portfolio for success. Sign up here.

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Federal Reserve Signals Only One Cut in 2026

Federal Reserve Chair Jerome Powell and projections by Fed officials suggest the bar for future interest rate cuts will be much higher, after they cut rates by a quarter point on Wednesday. Their projection sees just one quarter-point rate cut for next year, far less than what the market expects.

• There’s tension that will define policy in the months ahead: whether officials continue cutting rates to support a cooling labor market or hold steady because inflation is above the Fed’s 2% target. Balancing those risks will become a central question at the Fed’s meetings throughout 2026.
• Three members dissented: Two wanted no cut, and one wanted a half-point cut. Economic projections put the benchmark rate at 3.25% to 3.5% by the end of 2026, a quarter-point lower from now. They have the unemployment rate ending 2025 at 4.5%, and 4.4% next year.
• Policymakers boosted their economic projections for 2026, estimating that real GDP will increase by 2.3%, from 1.8% before. They also lowered their inflation projections, and expect a personal consumption expenditures price index of 2.9% by year-end, declining to 2.4% in 2026.
• The Fed will start purchasing short-term U.S. debt on Friday, earlier than Wall Street expected, and will buy approximately $40 billion a month in Treasury bills. Powell said the buying is “solely for the purpose of maintaining ample supply of reserves over time.”

What’s Next: Powell wouldn’t say whether he will stay on the Board of Governors after his term as Fed Chair expires in May. “I’m focused on my remaining time as chair,” Powell said. Asked if President Donald Trump openly discussing his successor was affecting his job, Powell said: “No.”

— Nicole Goodkind and Janet H. Cho

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Tech Giant Posts Mixed Earnings Report Amid Cloud Transition

Oracle has been transitioning to a cloud computing company, and is spending to get there. It reported mixed second quarter earnings and third quarter guidance that fell short of expectations, as cloud spending is driving capital expenditures to new levels: $35 billion over the past 12 months.

• Analysts were looking to Oracle’s earnings for confirmation that demand for software remains robust. Adjusted earnings of $2.26 a share, crushed consensus estimates. The big beat was largely driven by the sale of Oracle’s interest in the Ampere chip company to SoftBank for $2.7 billion.
• But revenue of $16.06 billion fell shy of the $16.19 billion expected. Cloud revenue rose 34% from last year, while revenue for Oracle’s legacy packaged software business dropped 1% from a year ago. Adjusted operating margin fell to 41.9%, from 43.4% last year.
• Oracle’s multiyear backlog swelled to $523 billion, up $68 billion from last quarter, a key metric. Five years ago, Oracle began implementing the Microsoft cloud strategy: moving customers to cloud-based software and building out rentable data-center infrastructure to compete with Amazon Web Services.
• In the process of becoming a cloud infrastructure provider, Oracle is reshaping its balance sheet and cash flows. It added $18 billion in debt in September, and it will have to finance a lot more to fulfill its cloud customer contracts.

What’s Next: Oracle’s shift to cloud infrastructure is accelerating because of the OpenAI contract and the related Project Stargate, a venture with SoftBank, OpenAI, and Emirati investor MGX to spend half a trillion dollars on new U.S. data centers. The first of those data centers opened in September.

— Adam Levine and Janet H. Cho

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Tariffs In Focus as Administration Awaits Court Ruling

The Supreme Court could release its decision as early as today on the legality of the tariffs that are the centerpiece of President Donald Trump’s economic agenda. Specifically, the Court is considering Trump’s use of emergency powers to place tariffs on imports from around the world.

• The timing of the Court’s decision isn’t known, but U.S. Trade Representative Jamieson Greer has said he expects a decision by year-end. Veda Partners’ director of economic policy, Henrietta Treyz, is bracing for one as early as this week or next.
• Treyz notes it took lower courts 35 days to decide Trump’s use of the emergency powers for tariffs was invalid. A ruling against the administration would threaten the core of Trump’s trade policy and raise new questions about the government’s budget deficit, even triggering payments to some big companies.
• Ryan Majerus, King & Spalding partner and former trade official, says if it doesn’t come by next week, it likely would arrive in the spring. The narrower the decision’s scope, the sooner it’s likely to come, he added. Several Justices appeared to be skeptical about some of the administration’s claims.
• For businesses hit by tariffs and investors worried about the fiscal deficit, the big question will be what the court says about refunds, and whether it has to repay in full and who gets money back. Dozens of companies including Costco have sued to make sure they are eligible for refunds.

What’s Next: The U.S. could consider leaving its trade pact with Mexico and Canada, crafted in 2020 by the first Trump administration as an update to the 1992 North American Free Trade Agreement. Greer said the USMCA, in which he played a role, is entering a review period.

— Reshma Kapadia

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Paramount Skydance Takes Fight to Warner Bros. Shareholders

Paramount Skydance isn’t going down without a fight—and this time they’re taking the fight straight to Warner Bros. Discovery shareholders. In a letter released late Wednesday they lay out the case for why their offer for Warner is “superior” to Netflix’s offer, both in terms of value and certainty of completion.

• Paramount said its $30 a share all-cash offer was identical to the terms it presented to Warner Bros. privately before it launched its hostile bid on Monday. It appealed to Warner Bros. shareholders to tender their shares and bristled at the idea it hadn’t lined up the necessary financing.
• The letter also listed several reasons why Paramount believes its offer to Warner Bros. is superior to the agreement announced by Netflix. The Paramount+ owner pointed to the difference in price tags, noting that Netflix’s cash component is about $18 billion lower than Paramount’s.
• Paramount also said that receiving regulatory approval would be easier than Netflix’s deal, noting Netflix is the top streaming platform by subscribers, while Warner’s HBO Max is fourth. Combined they would have a 43% market share. Netflix says it’s sixth in viewing hours, citing Nielsen.
• Paramount’s CEO is David Ellison, whose father, Larry Ellison, is the co-founder of Oracle and a close ally of President Donald Trump. Paramount’s latest Securities and Exchange Commission filing listed multiple financing partners, including the private equity firm Affinity Partners led by Trump’s son-in-law Jared Kushner.

What’s Next: The letter said Paramount’s tender offer is open for at least 20 days and that Warner Bros. will respond to it within 10 days in a regulatory filing. The closing of the tender offer is conditioned on a majority of Warner Bros. shares tendering in its favor and other factors.

— Angela Palumbo and Liz Moyer

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Silver Prices Surge to Record as Rally Races On

Silver prices jumped to an all-time high above $63 an ounce Thursday as investors continue to seek inflation hedges and industrial alternatives to gold and digital currencies.

• The precious metal is finding a place in investment portfolios as protection against currencies losing value, as well as an industrial play on new technologies powering global growth.
• Silver remains a key component in building artificial-intelligence data centers and producing electric vehicles—demand for both of which has increased over the past year, catapulting prices higher.
• Silver futures have climbed more than 113% in 2025, on track for their best year since 1979. Gold prices, which also hit record highs again last month, have risen around 60% this year and are also poised for their best annual performance in 46 years.
• “Silver’s relentless surge in 2025 will be remembered as one of the most dramatic revaluations in modern precious metals history,” said Saxo Bank’s Head of Commodity Strategy Ole Hansen.

What’s Next: Silver is still likely to outperform next year, Hansen said, even if central banks don’t keep delivering rate cuts as the precious metal’s status as an inflation hedge comes to the fore.

— Martin Baccardax and Callum Keown

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner