Stock Markets May Have Been Hasty With Inflation Bounce. Beware These Risks and 5 Other Things to Know Today.

Never look a gift horse in the mouth, goes the old saying. The stock market was happy to welcome a cooler-than-expected inflation reading, while putting aside worries about the reliability of the data and whether the Federal Reserve is out of step with the rest of the world.

The anticipation of unwrapping a present heightens the excitement, which might account for enthusiasm about the delayed November consumer-price index reading on Thursday. Year-over-year price increases of 2.7% were down from 3% in September, which the market took as a green light for the Fed to keep cutting interest rates.

There are plenty of questions about the figures due to disruptions surrounding data collection amid the government shutdown. Housing costs were a particular issue, with missing data pushing down estimated rent levels. But investors weren’t in the mood to be doubters, especially with the artificial-intelligence trade gaining momentum on the back of Micron earnings and reports OpenAI is in talks to raise as much as $100 billion.

Optimism about Fed cuts is justified, considering the elevated unemployment rate from earlier this week. But it’s worth noting a couple of risks. First, data gaps leave the risk of a higher inflation reading in January. Second, while the Fed is cutting, other global central banks are pausing or even raising rates. Most importantly, the Bank of Japan lifted its policy rate target to 0.75% on Friday, the highest level in 30 years. The end of ultralow interest rates in the Asian country could raise costs for some U.S. investors who borrow cheap yen to fund trades, while incentivizing Japanese savers to sell overseas assets and bring their cash back home.

Neither of those risks is going to ruin Christmas or the awaited Santa Claus rally. A more accurate inflation reading will come in the new year, while the effects of Japanese interest rates rising could take months or years to feed into the market. Still, it’s worth putting them down on the list for things to watch out for in 2026.

—Adam Clark

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TikTok and Oracle Sign Agreement for U.S. Venture

The multiyear saga about TikTok’s ownership may be drawing to a close, finally. On Thursday, the short-form video app and its Chinese owner ByteDance signed agreements with software giant Oracle and two other investors to form a new U.S. joint venture.

• CEO Shou Zi Chew told employees in a memo viewed by Barron’s that the venture will be 50% held by a consortium of new investors, including Oracle, private-equity firm Silver Lake, and Emirati state-owned investor MGX. Each will hold 15% in the new entity, named TikTok USDS Joint Venture LLC. The remaining 5% is held by several others.
• ByteDance will retain a 19.9% stake, and affiliates of certain existing investors of ByteDance will hold 30.1% of the venture, the memo reads.
• Lawmakers from both U.S. political parties have labeled TikTok a national security threat due to its Chinese ownership, and in April 2024 President Joe Biden signed a law that would ban the app unless it was sold. TikTok Was unavailable to users in the U.S. for a brief period in January for a brief period in January.
• President Donald Trump wanted TikTok banned in his first term in the White House but on his second Inauguration Day he signed an executive order to keep it running. In September, Trump signed another executive order that extended the deadline to enforce a ban.

What’s Next: The memo stated that the joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance. The deal will close on Jan. 22, according to the memo.

— Angela Palumbo and George Glover

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Nike Beats Forecasts, But China Sales, Profit Disappoint

Nike’s new CEO Elliott Hill said the athletic apparel maker is in the middle innings of a comeback. The company topped fiscal second-quarter earnings and revenue expectations, but investors were disappointed about declining profit and lackluster sales in the key China market.

• Revenue rose 0.6%, to $12.4 billion for the quarter ended Nov. 30. North America and the region including Europe, Middle East, and Africa were up 9% and 3%, respectively, from a year ago. Greater China sales, however, dropped 17%, accelerating from the first quarter’s 9% decline.
• Adjusted earnings of 53 cents a share were down 32% from a year ago. Nike’s gross margin slid three percentage points, primarily because of higher U.S. tariffs on imports. Direct-to-consumer sales slid 8%, while demand-creation and marketing costs rose 13%.
• Hill said Nike is making progress in areas it prioritized and is confident in its actions to drive long-term growth and profitability. Executives have warned that Nike’s recovery wouldn’t be linear, meaning some quarters would be stronger than others as the new initiatives take hold.
• Nike is facing more competition from brands like Hoka, which is owned by Deckers Outdoor, and On Running. It also has challenges clearing out old inventory, including casual sneakers, and is facing more budget-conscious consumers, MarketWatch reported.

What’s Next: Nike has refrained for several quarters from providing full-year guidance, but it expects third-quarter revenue to be down by a low single-digit percentage. Analysts had projected a 1.3% increase. North America will see modest growth in the quarter, while the trends in China should track the second quarter.

— Sabrina Escobar and Janet H. Cho

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FedEx’s Earnings Beat Expectations as Shipping Volumes Rise

FedEx beat expectations for second quarter revenue and profit, getting a boost from cost reductions and higher U.S. shipment volumes that allowed it to raise the low end of its full-year outlook. CEO Raj Subramaniam said it was able to execute on its growth strategy despite the challenging environment.

• The shipping giant reported adjusted earnings of $4.82 a share and sales of $23.5 billion. Higher U.S. and international priority package yields boosted results for its Federal Express segment, as did higher domestic package volume. The gains were only partially offset by trade policy shifts, it said.
• FedEx is spinning off its freight business to a separate company, and said that process is on track and expected to be finished June 1. The new company is having an investor day on April 8 ahead of the separation. One-time spinoff costs in the quarter were $152 million.
• CFO John Dietrich said the second quarter results and updated guidance reflect that momentum is building and that the progress it has made on strategic initiatives is tangible. Second quarter revenue was 7% higher than a year ago.
• FedEx is still some way off its recent peak in quarterly sales, at $24.4 billion in the fourth quarter 2022. More recently, inflation and lower domestic shipment volumes weighed on results. But it got new business from Amazon.com after United Parcel Service walked away, citing insufficient profitability.

What’s Next: Now FedEx expects sales of 5% to 6% and adjusted earnings of $17.80 to $19 for the full fiscal 2026 year. That’s marginally better than September, when its forecast was for 2026 sales growth of 4% to 6% and adjusted earnings of $17.20 to $19 a share.

— Al Root and Liz Moyer

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Trump’s Media Company Going Nuclear in $6 Billion Deal

Trump Media & Technology Group, the company that owns President Donald Trump’s social-media platform, struck an odd deal to expand into nuclear fusion by buying TAE Technologies for $6 billion in stock. They framed it as boosting America’s chances to win the AI revolution.

• If approved, the combined company would start building a 50-megawatt utility-scale fusion power plant next year. They are looking for a site and planning additional fusion power plants supplying 350 to 500 megawatts. Fusion is a futuristic technology that’s not considered commercially viable yet.
• But nuclear energy is a battleground unfolding between the U.S. and China to dominate AI. Modular reactor maker Oklo is one of the few publicly listed American nuclear companies. Privately held TAE is backed by Alphabet-owned Google, Chevron, and Goldman Sachs.
• TAE gives Trump Media, which reported $716 million in cash and equivalents and other investments as of Sept. 30, a new business line that could eventually produce substantial revenue. Trump Media gives TAE access to capital it desperately needs to build its first commercial reactor.
• China investing in fusion and scaling its nuclear grid into 2030 puts more pressure on the U.S. to respond, Wedbush analyst Dan Ives wrote. TAE, now with significant capital, will be at the forefront of U.S. nuclear fusion ambitions, he added.

What’s Next: TAE CEO Michl Binderbauer, who will head the combined company with Trump Media CEO Devin Nunes, projects that its first reactor could be online in 2031. The reactor is expected to have the capacity for 50 megawatts of electricity, or enough to power tens of thousands of homes.

— George Glover, Avi Salzman, and Janet H. Cho

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President Floats Housing Affordability as Lawmakers Question Deal

President Donald Trump has been arguing his case to Americans that prices are falling. One initiative he has been floating this week is housing reform, telling reporters in the Oval Office on Thursday that he’s even considering a national emergency on housing. Wednesday night he promised aggressive housing reforms.

• Affordability in housing has been a big focus this year as still-high mortgage rates weigh on the real estate market. Some lawmakers are urging the administration to investigate the pending merger of Compass and Anywhere Real Estate for competitive reasons.
• Sens. Elizabeth Warren and Ron Wyden, both Democrats, told the Justice Department and the Federal Trade Commission that the merger could threaten the transparency of property listings and exert greater control over consumers and the home buying process.
• New York-based Compass announced the all-stock deal this year to create a company with $10 billion in enterprise value. The deal is expected to close in the second half of 2026. Should the merger terminate because of a failure to clear certain regulatory hurdles, Compass would pay Anywhere a $350 million termination fee.
• Signs of weakening shelter costs raise hopes for a less competitive and more hospitable homebuying season in 2026 after a third straight year of worse-than-usual sales. Fixed 30-year mortgage interest rates have been drifting lower, down 0.05 of a percentage point to 6.22%, according to Mortgage News Daily.

What’s Next: Trump has mentioned the national housing emergency idea before and nothing came of it. Another recent idea floated by some in the administration was the 50-year mortgage, though that seems also to have fallen by the wayside. Trump takes his affordability message on the road to North Carolina today.

— Shaina Mishkin and Liz Moyer

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