CLOSING BELL
Beautiful Cut
The market climbed into the close on Wednesday after the Fed delivered the rate cut everyone expected.
Small caps flew, the Russell hit an all-time high, and the Dow was up a beautiful 1%.
There was drama, though, from the FOMC's forward-looking rate and inflation predictions, but more on that later. What matters is that the market climbed within a hair's breadth of a fresh record.
In other news, Nvidia denied a The Information report that Chinese hyperscalers smuggled in Blackwell chips to train DeepSeek models, after the Trump Admin approved the sale of H200 chips, and analysts were careful not to upgrade the sales expectations on the chip giant.
The Trump administration seized an oil tanker off the coast of Venezuela on Wednesday.
AFTER THE BELL
Tonight's Earnings Review: Traders Are Getting Skimpy With Tech
Oracle $ORCL ( ▲ 0.67% ) was falling 10$ post-market, and it had nothing to do with the raw numbers. The software cloud company showed revenue of $16.3 billion, right around forecasts, and it wasn’t enough.
Digging in: Cloud revenue grew 34% to $8B, but that was slightly below estimates. Most importantly, Oracle grew its bookings to half a trillion dollars, but that huge number is based on forward-looking datacenter sales that Oracle needs to finance. It needs cash to literally build miles of cooling racks, power generators, and GPUs to realize any of these sales.
The company is signing massive cloud deals driven by demand from large AI companies, but the question for investors is can they actually follow through.
Chairman and CTO Larry Ellison said they expect to double the number of datacenters they run to 71 in “the next several years.” Oracle grew its MultiCloud database revenue 817% in Q2.
Adobe $ADBE ( ▼ 0.35% ) climbed just slightly. The Photoshop digital media leader beat expectations across the board, posting non-GAAP earnings of $5.45 per share on Q4 revenue of $6.2 billion. The company provided robust guidance for fiscal 2026 through the strong monetization of its Generative AI features.
Synopsys $SNPS ( ▲ 2.14% ), the electronic design automation software giant, beat expectations for the fourth quarter, reporting adjusted EPS of $2.9, above the $2.3 estimate. Revenue reached $2.26 billion, topping the $2.25 billion forecast.
MACRO NEWS
🚨 FED CUTS RATES, But Dot Plot Dissagree
The Federal Reserve's Federal Open Market Committee delivered a widely expected 25 basis point rate cut, bringing the new target range for the Federal Funds Rate to 3.5% / 3.75%. Powell said that economic activity is expanding slowly, job gains have slowed, and the unemployment rate has edged higher, but inflation has mostly stayed put.
It’s the final rate cut this year, and final cut we may see under Powell’s watch, who did his best to organize a divided vote. He had his work cut out for him, and based on the split forward-looking projection, Kevin Hassett, or whoever takes Powell’s job in May, is in a tough spot too.
Betsey Stevenson, professor at the University of Michigan School for Public Policy, said people don’t care about the ‘inflation rate’ as much as media and policymakers do. Americans are frustrated with the price level: the prices of goods like food and rent are irreversibly higher.Keeping inflation in check slows the climb, but it doesn’t bring prices down.
She told Bloomberg Businessweek that Powell tried to tell the press corps that focusing on healthy employment is the only way to make Americans feel better.
The Political Tension in the Dot Plot
The most crucial takeaway from the meeting was the Dot Plot summary, which shows how individual members see inflation, growth, ect in the future. And boy, what a mess.
The median projection among policymakers calls for only one 25-basis-point cut in 2026. It’s a "hawkish” tone that sends the message that the Fed is cutting now solely to support the labor market, but is otherwise scared inflation is not yet under control.
2026 Forecasts: Unemployment at 4.4% and PCE inflation at 2.4%, and a 3.4 FFR.
The Conflict: The Fed expects inflation to be near its 2% goal, but it also anticipates a deteriorating labor market, which argues for more aggressive cuts than the single cut projected.
The Three Dissenters
For the first time since 2019, the decision was met with three dissents, marking a clear split in the committee:
Trump’s recent Fed Governor pick, Stephen Miran, voted against the cut, preferring a larger 50-basis-point reduction, arguing that labor-marketweakness necessitates a bolder move.
Austan Goolsbee & Jeffrey Schmid: Both voted to hold rates steady (no change), likely prioritizing the fight against inflation, which remains above the 2% target.
The future-looking Dot Plot further showed that three or more voting members even saw rates going UP next year! Looking ahead, one member (likely Miran) foresees as many as five rate cuts in 2026, down to a 2.0% target rate. This widening range of views underscores the high-stakes debate over the future of monetary policy ain’t over yet.
SECTORS
Twelve Days Of Silver
I am unabashedly stealing this idea from my college, Jonathan Morgan from Cryptotwits:
It’s the twelve days of silver, my true love (the market) gave to me:
Five Golden Crosses, Four Years of Deficits, Three Solar Panels, Two EVs, and a breakout past the 1980 hiiiiiiigh
Silver prices reached an all-time high of $61.85 per ounce on Wednesday, topping the $60 per ounce mark for the first time in history and marking a surge of 113% so far this year. This massive gain was triggered by the Federal Reserve's rate cut, which generally raises the appeal of non-yielding assets like precious metals.
The price action is driven by two main forces: a tight physical market of actual silver nuggets supported by rising industrial demand and the metal's recent designation as a critical mineral by the U.S. government. Rate cuts and economic uncertainty also help metals climb in value, of course.
Here’s how the rest of the market turned out
POPS & DROPS
Top Stocks News Stories
Biotech Acquisition climbed 92% on acquisition completion.
Magnificent Seven has only one stock trading below its 200-DMA (META)
Nvidia denied claims of DeepSeek using banned Blackwell chips.
Photronics stock surged to 24-year high on strong earnings.
Lake Resources stock tanked 40% hitting nine-year lows.
WHAT’S ON DECK
Tomorrow’s Top Things
Economic data: IEA Monthly Report (4:00 AM), OPEC Monthly Report (7:00 AM), Continuing Jobless Claims (8:30 AM), Initial Jobless Claims (8:30 AM), Trade Balance (8:30 AM), 30-Year Bond Auction (12:00 PM), Fed's Balance Sheet (4:30 PM).
Pre-Market Earnings
CIENA Corp Analysts expect the networking hardware provider to report adjusted earnings of approximately $0.40 to $0.42 per share on revenue of about $1.11 billion for the fiscal fourth quarter, with the market focusing on updates regarding the persistent supply chain normalization and its impact on gross margins.
After-Market Earnings :
Costco Wholesale $COST ( ▼ 1.58% ) Wall Street forecasts the warehouse club will report adjusted earnings of approximately $4.27 per share on revenue of roughly $67B billion for the fiscal first quarter, with the crucial metric to watch being comparable sales growth (ex-gas and foreign exchange) and any update on a potential membership fee hike.
Broadcom $AVGO ( ▲ 1.64% ) The semiconductor giant is projected to post adjusted EPS of around $11.10 per shareon revenue of $13.3 billion for the fiscal fourth quarter, with the primary focus being on the accelerating demand for its custom AI chips and the initial integration and financial contribution from the recently closed VMware acquisition.
Lululemon Athletica $LULU ( ▲ 2.93% )
Analysts expect the athletic apparel retailer to report adjusted earnings of about $2.21 per share on revenue of $2.4 billion for the third quarter, with attention centered on same-store sales growth in North America and the company's detailed guidance for the all-important holiday quarter.