Markets Wanted a Party. The Economy Brought a Reality Check.

The Federal Reserve handed investors another rate cut. Wall Street responded by immediately looking for something to worry about. It found plenty. Tech stumbled, geopolitics glowered and commodities misbehaved. And to top it off, fresh economic numbers suggest America's post-pandemic glow-up may be losing its sheen.

The immediate drama came courtesy of Oracle. The company, which has spent the past year bragging about cloud empires and data-centre dreams, revealed that its forecasts were weaker than hoped and that its annual spending will overshoot expectations by $15 billion. Investors punished the stock with an 11% dive, its worst quarter since the early 2000s, reviving fears that some companies, in their rush to scale, are stretching their balance sheets too far.

The market's response was swift and sulky. Nvidia and Broadcom dipped, Microsoft and Amazon softened. Even crypto flinched: bitcoin briefly slid below $90,000, dragging Strategy and Bit Digital with it.

But the broader economy, for all its bruises, has not collapsed. New figures show U.S. jobless claims rising to 236,000, a smidge higher than expected but not remotely recession-level. Meanwhile, the September trade deficit shrank to its smallest since mid-2020. Next week's delayed reports on payrolls and inflation will flesh out the picture, especially after Jerome Powell warned the country may be losing 20,000 jobs a month.

Still, traders are convinced the Fed has more generosity to dispense. Markets expect at least 50 basis points of further cuts next year, especially with Donald Trump likely to install Kevin Hassett, a known dove, at the top of the central bank. Powell, meanwhile, did what he always does: hinted at nothing, promised nothing and left Treasury yields to drift lower on vibes alone.

The Fed cut rates by 25 basis points, bringing them down to a range of 3.50% to 3.75%. In his remarks, the institution's chairman described the move as balanced: it addresses recent concerns about the labour market without undermining the central bank's ability to act should imbalances emerge in forthcoming data. Jerome Powell repeatedly stressed that the Fed remains appropriately positioned, while simultaneously upgrading the 2026 US growth forecast and noting the relatively cautious outlook among FOMC members regarding further easing.

The US central bank positioned itself broadly in line with market expectations. The initial reaction was one of relief, even though the picture painted by the central bankers leaves many questions unanswered for 2026. Shortly afterwards, Oracle rained on the parade.

Currencies reacted accordingly. The dollar slipped to a seven-week low, nudging the euro toward a two-month high. Oil slipped despite the U.S. seizing a tanker off Venezuela and Trump turning up the pressure on Ukraine to accept an American-drafted peace plan (which could, incidentally, release more Russian supply into already soggy markets). Gold and silver, meanwhile, continued behaving like the world is ending tomorrow, both set for their strongest year since 1979. 

Washington has circulated one-page "vision documents" for reconstruction and reintegration in Ukraine - drafts that have unnerved European allies who would prefer not to wake up and discover the global economic map redrawn on American stationery.

On the macro agenda, Broadcom, reporting after the bell, is expected to post strong results. 

In the Asia-Pacific region, Oracle quickly overshadowed the Fed. Japan, South Korea, China and Taiwan all declined, dragged down by their tech stocks. India, often moving counter to the regional trend, and Australia, where the tech sector is relatively slim, managed modest gains. Europe is bullish, while futures on Wall Street are down.

Today's economic highlights: 

On today's agenda: the Swiss National Bank's policy rate decision; In the United States, new unemployment claims and the final demand of the Producer Price Index for September. See the full calendar here.

• Dollar index: 98,475
• Gold: $4,215
• Crude Oil (BRENT): $61.74 (WTI) £57.75
• United States 10 years: 4.14%
• BITCOIN: $90,095

In corporate news:

• Lockheed Martin launched Astris AI, a new initiative for government collaboration involving Oracle, Nvidia, and Meta.
• Accenture invested in Ryght AI to boost clinical research in life sciences using agentic AI.
• Bristol-Myers-Squibb received FDA priority review for expanding the use of Opdivo with chemotherapy in advanced classical Hodgkin lymphoma.
• Altria announced CEO Billy Gifford will retire in May, with CFO Sal Mancuso set to succeed him and Heather Newman becoming the next CFO.
• Loews won a key Delaware Supreme Court decision, with most claims resolved in its favor.
• GE Vernova and Seatrium secured a major contract from Tennet to connect 2.2 GW of North Sea wind power to Germany's grid.
• AECOM was awarded a $270+ million FAA contract to modernize U.S. aviation infrastructure over 10 years.
• Alnylam will repurchase $34.4 million of convertible notes for $51.9 million.
• AeroVironment won a $4.8 million contract to supply ROVs for the U.S. Coast Guard's modernization plans.
• Harness, backed by Goldman Sachs Alternatives, raised $240M to scale its AI platform and reached a $5.5B valuation.
• Roivant provided updates on key drug candidates, with Brepocitinib NDA filing planned for early 2026.
• Starbucks' union strike expanded to 180 stores across 130 cities, making it the largest in company history.
• Amazon is developing a one-hour "rush" pickup service combining online and physical store orders.
• Eli Lilly's weight-loss drug retatrutide showed significant weight loss and pain relief in knee osteoarthritis in a phase 3 trial.
• SpaceX is reportedly preparing a 2026 IPO that could value the company over $1 trillion, stirring massive investor interest.
• The EU approved €623M in state aid for Globalfoundries and X-FAB to expand chip production in Dresden and Erfurt.
• Flutter Entertainment appointed Sally Susman as a non-executive director.
• Berkshire Hathaway confirmed Greg Abel will take over as CEO on Jan 1, succeeding Warren Buffett, who remains chairman.
• Serval, an AI startup for IT automation, raised $75M in a Sequoia-led round and hit a $1B valuation just months after its last funding..
• Permian Basin oil production is expected to peak in December, but thanks to innovations from firms like Exxon Mobil and Chevron, output will remain stable and cost-efficient for years.
• BlackRock sold a 7.1% stake in Naturgy for $2 billion via JPMorgan, reducing its holding to 11.42% amid strong performance from the Spanish utility.
• Microsoft announced partnerships to boost agentic AI adoption amid challenges faced by OpenAI.
• Intel explores acquisitions of Rivos and Sambanova, while facing governance concerns and a reduced EU antitrust fine.
• Oracle warned about AI profitability, impacting tech stocks and risk appetite, despite strong demand in cloud-AI.

Analyst Recommendations:

• Citizens Financial Group, Inc.: Baird downgrades to neutral from outperform with a target price of USD 60.
• Pilgrim's Pride Corporation: Grupo Santander upgrades to outperform from neutral and reduces the target price from USD 57 to USD 56.
• Pinnacle Financial Partners, Inc.: Raymond James upgrades to strong buy from market perform with a target price of USD 120.
• Truist Financial Corporation: Baird downgrades to neutral from outperform with a target price of USD 52.
• Unity Software Inc.: Piper Sandler & Co upgrades to overweight from neutral and raises the target price from USD 43 to USD 59.
• Bloom Energy Corporation: Rothschild & Co Redburn maintains its sell recommendation and raises the target price from USD 10 to USD 40.
• Centene Corporation: Baird maintains its neutral recommendation and raises the target price from USD 28 to USD 36.
• Credo Technology Group Holding Ltd: BNP Paribas maintains its outperform recommendation and raises the target price from USD 165 to USD 245.
• Knight-Swift Transportation Holdings Inc.: Wells Fargo maintains its overweight recommendation and raises the target price from USD 48 to USD 58.
• Monday.com Ltd.: Tigress Financial Partners maintains its buy recommendation and reduces the target price from USD 450 to USD 310.
• Mongodb, Inc.: Arete Research maintains its buy recommendation and raises the target price from USD 395 to USD 495.
• Netflix, Inc.: Seaport Global maintains its buy recommendation and reduces the target price from USD 1385 to USD 115.
• Oracle Corporation: BMO Capital Markets maintains its outperform recommendation and reduces the target price from USD 355 to USD 270.
• Unitedhealth Group Inc.: Baird maintains its underperform recommendation and raises the target price from USD 198 to USD 291.
• Warner Bros. Discovery, Inc.: Freedom Broker maintains its hold recommendation and raises the target price from USD 10 to USD 30.