Closing Recap 

U.S. stocks rallied on Wednesday after the Federal Reserve delivered its third consecutive interest rate cut, but the gains proved fleeting as a disappointing earnings report from Oracle sent futures tumbling overnight. The Fed’s 25-basis-point cut was widely expected, but the accompanying statement and “Dot Plot” signaled a higher bar for future easing, a “hawkish cut” that initially weighed on sentiment. However, dovish-leaning comments from Chair Powell during his press conference, combined with a surprise announcement that the Fed would immediately begin buying Treasury bills, reignited the market’s “animal spirits.” The S&P 500 and Dow both rallied over 1%, and the small-cap Russell 2000 hit a new record high. This optimism was short-lived, however, as Oracle’s 11% post-earnings plunge reignited fears about the AI trade and sent Nasdaq futures down over 2% in after-hours trading. 

Key Takeaways 

• Fed Delivers “Hawkish Cut”: The Fed cut rates by 25 bps but signaled a pause, with the “Dot Plot” showing only one more cut in 2026. The move was highly divided, with three dissenting votes. 
• Powell’s Dovish Pivot and T-Bill Buying Spark Rally: Stocks surged after Chair Powell emphasized risks to the labor market and ruled out rate hikes, and the Fed announced it would begin buying $40 billion in T-bills per month starting this Friday. 
• Rally Evaporates as Oracle’s Earnings Miss Hits Tech: The post-Fed rally was completely erased in after-hours trading after Oracle’s disappointing revenue and higher spending forecast sent its stock down 11% and reignited fears about AI valuations. 
• Small Caps Hit Record High: The Russell 2000 surged 1.32% to a new all-time high, continuing its strong outperformance as lower rates provide a powerful tailwind. 
• Dollar and Yields Fall: The U.S. Dollar Index fell to a multi-week low, and Treasury yields declined after Powell’s dovish press conference and the surprise T-bill announcement. 
• Aussie Dollar Plummets on Dismal Jobs Data: The Australian Dollar is the biggest loser in G10 FX, tumbling after a shockingly weak jobs report showed a net loss of jobs and a fall in labor force participation. 
• Yen Remains Strong, Intervention Fears Linger: The Japanese Yen is a rare pocket of strength, benefiting from safe-haven flows and the prospect of a BoJ rate hike, though it has given back some gains against the resurgent dollar.
• Gold Eases, Bitcoin Tumbles: Gold gave back some of its post-Fed gains in Asian trading. Bitcoin was hit hard, with prices falling below $90,000 as levered long liquidations resumed. 
• Jobless Claims in Focus: With the Fed decision now in the rearview mirror, the market will turn its attention to today’s weekly Jobless Claims report for the next read on the U.S. labor market. 

Market Overview

The market got the rate cut it wanted, but the celebration was short-lived. Wednesday’s session was a perfect microcosm of the market’s current schizophrenia. For hours, stocks traded sideways, paralyzed with anticipation ahead of the FOMC decision. The Fed’s initial announcement was a classic “hawkish cut”: they delivered the expected 25-basis-point reduction but paired it with a “Dot Plot” showing only one more cut in 2026, a clear disappointment for a market hoping for more. However, the mood shifted dramatically during Chair Powell’s press conference. His dovish pivot—emphasizing risks to the labor market and effectively taking rate hikes off the table—was exactly what the bulls wanted to hear. The surprise announcement of immediate Treasury bill purchases added another shot of liquidity-fueled adrenaline, sending stocks soaring into the close. 

Index	Up/Down	%	Last
DJ Industrials	497.58	0.0105	48057
S&P 500	46.29	0.0068	6886
Nasdaq	77.67	0.0033	23654
Russell 2000	33.36	0.0132	2559

But the euphoria was stunningly short-lived. A dismal earnings report from Oracle after the bell acted as a harsh reality check, sending a shockwave through the tech sector and erasing the day’s gains in the futures market. The cloud computing giant’s revenue miss and higher spending forecast have reignited the fierce debate about how quickly companies can monetize their massive AI investments. The market is now caught in a tug-of-war between a newly dovish Fed and growing fears of an AI bubble, a dynamic that is likely to lead to continued volatility. The Asian session has been a bloodbath for risk assets, with U.S. equity futures plunging as the market digests the hawkish Fed tilt and Oracle’s weak earnings. The Australian dollar is in freefall after a dismal jobs report. The Japanese Yen is a rare outperformer on safe-haven flows. European markets are set for a sharply lower open, catching up to the brutal sell-off that has gripped global markets overnight.

Economic Calendar 

With the Fed decision now over, the market’s focus will shift to incoming economic data. Today’s slate is relatively light, with Jobless Claims being the main event. Data Released Yesterday / Overnight: 

• FOMC Interest Rate Decision: Cut the Fed Funds Rate by 25 bps to a range of 3.50%-3.75%, as expected, but signaled a potential pause. 
• Australian Employment Report (Nov): A big miss, with the economy losing -21.3K jobs versus a +20.0K forecast, though the unemployment rate held steady due to a drop in participation. 

Today’s Economic Calendar: 

• European Session: The Swiss National Bank (SNB) held its policy rate at 0.00%, as expected. 
• U.S. Session: The main highlight is the weekly U.S. Jobless Claims report (Initial Claims exp: 220K). After a string of mixed labor market signals, this will be a key indicator for traders assessing the economy’s health. 

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

The “hawkish cut” has hammered commodities and crypto. Gold initially climbed on the Fed’s rate cut but has since given back those gains, trading around the $4,200 level. The metal is caught between the supportive backdrop of a dovish Fed and a modest recovery in the U.S. dollar. Crude oil prices were steady, with WTI trading near $58.50 a barrel, as the market balanced the supportive Fed decision against ongoing oversupply concerns.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.21	0.0036	58.46
Gold	-16.2	-0.0038	4220
EUR/USD	0.0069	0.0059	1.1694
USD/JPY	-0.94	-0.006	155.92
Bitcoin	-2500	-0.027	90421
10-Year Note Yield	-0.025	-0.0059	0.0416

The U.S. dollar tumbled after the Fed’s dovish pivot, providing a strong tailwind for G10 currencies. 

• EUR/USD: The pair surged to a multi-week high, breaking above 1.1690 as the dollar sold off. With the ECB on hold and the Fed now in easing mode, the policy divergence theme is providing a powerful lift for the single currency. 
• GBP/USD: The pound also rallied sharply, with GBP/USD punching through the 1.3400 level to a seven-week high. The move was driven almost entirely by dollar weakness, which is overpowering domestic concerns and dovish BoE expectations. 
• USD/JPY: The pair slumped to near 156.00 as the dollar’s decline was amplified by a fundamentally stronger yen. Hawkish speculation around the Bank of Japan, combined with the Fed’s dovish turn, is creating a powerful bearish setup for the pair. The key battle remains around the 156.00 level, which holds a massive $1.24B in options expiries.
• AUD/USD: The Aussie is the biggest G10 loser, tumbling after the disastrous jobs report. The data has completely reshaped the outlook for the RBA and put the currency under intense pressure.

Cryptocurrencies: The crypto market was hit hard by the risk-off mood that followed Oracle’s earnings. Bitcoin fell sharply, dipping below $90,000 as leveraged long positions were liquidated. The Fed’s divided cut and cautious outlook have clouded the picture for risk assets, and Bitcoin is feeling the heat. U.S. Treasury yields fell sharply after Chair Powell’s dovish press conference and the surprise announcement of T-bill purchases. The benchmark 10-year yield dropped 4 basis points to 4.145%, reflecting the market’s increased confidence in a more accommodative Fed. 

Looking Ahead 

After a volatile 24 hours, the market will be looking for stability. The focus now shifts from Fed policy to incoming economic data, starting with today’s Jobless Claims report. The sharp negative reaction to Oracle’s earnings has put the entire tech sector on notice, and traders will be watching closely to see if the selling pressure broadens. With the market still digesting the Fed’s mixed signals, a period of choppy, headline-driven trading is likely as investors attempt to navigate the competing narratives of a dovish Fed and a potential AI bubble.

What to Watch

• The Post-Fed Fallout: The market is now in a full-blown “risk-off” mode. The key question is whether the sell-off will accelerate or if dip-buyers will emerge. The price action today will be critical in setting the tone for the remainder of the year. 
• The “Hawkish Cut” Narrative: The Fed’s message has changed the game. The market must now grapple with the prospect of a pause in the easing cycle, a major headwind for the risk assets that have rallied so strongly on dovish hopes. 
• The AI Bubble Debate Rekindled: Oracle’s weak earnings are a major blow to the AI narrative. This, combined with the broader tech sell-off, will intensify the debate about a potential bubble in the sector. 
• The Australian Dollar’s Collapse: The disastrous jobs report is a game-changer for the RBA. The Aussie is now highly vulnerable, and traders will be watching to see if the sell-off gathers momentum.