Mixed Market Reaction Despite Rate Cut

U.S. financial markets rose this week, buoyed by the Federal Reserve's decision to cut rates by 25 basis points. Fed Chair Jerome Powell implemented additional easing policy based on his assessment that the U.S. economy remains healthy, and Wall Street responded by setting new records.

However, not all sectors celebrated. Oracle's disappointing earnings report reignited concerns about excessive valuations in artificial intelligence-related stocks. The cloud infrastructure company saw its stock plummet 12.69%, falling short of market expectations, while Broadcom (-7.77%) also declined despite solid earnings, reflecting fatigue with AI investments.

Only One Rate Cut in 2026?

Market experts note that while the Fed's decision provided short-term relief, the consideration of only one additional rate cut in 2026 suggests that inflationary pressures have not been fully resolved.

Next Thursday's U.S. inflation data is expected to receive intense market scrutiny in this context. If the figures come in lower than expected, they could trigger a traditional year-end rally, but higher-than-expected numbers could increase market volatility.

Key Stock Movements This Week

Gainers:

• Confluent +29.86%: Surged after IBM announced plans to acquire the company for $11 billion. IBM is strengthening its software portfolio amid growing data exchange trends.

• Carvana +13.99%: Rose following inclusion in the S&P 500 index, attracting inflows from index-tracking ETFs.

• Ciena +8.29%: The telecommunications solutions manufacturer reported strong quarterly results with increased revenue and earnings, presenting an optimistic 2026 outlook.

• Abivax +14.74%: The chronic intestinal disease biotech company jumped on acquisition speculation from Eli Lilly. The surge follows strong clinical trial results for obefazimod, a ulcerative colitis treatment candidate.

Decliners:

• AutoZone -9.86%: The auto parts retailer saw temporary profitability decline despite the trend of Americans preferring used car purchases and maintenance over new vehicles.

Commodity Markets: Oil Prices Fall on Oversupply Concerns

In energy markets, Brent crude fell to $61 per barrel, marking its lowest level since late October. The U.S. Energy Information Administration (EIA) projects that U.S. crude oil production will reach a record 13.61 million barrels per day in 2025.

While OPEC anticipates global demand will increase by 1.3 to 1.4 million barrels per day in 2026, driven by non-OECD countries including China and India, oversupply concerns are growing as production increases outpace demand.

Market Indicators at a Glance

• Dow Jones: 48,458.05 (+1.05%)
• Nasdaq 100: 25,196.73 (-1.93%)
• FTSE 100: 9,649.03 (-0.19%)
• Gold: $4,302.49 (+2.41%)
• WTI Crude: $57.42 (-4.63%)
• EUR/USD: $1.17 (+0.88%)

Future Outlook [AI Analysis]

The Fed's accommodative stance is likely to continue for the time being, but the direction of monetary policy in 2026 will be determined by inflation indicators. AI-related stocks have entered an earnings verification phase, and volatility may persist as excessive expectations are adjusted.

The energy market is expected to see continued weakness in oil prices as oversupply conditions persist. However, geopolitical variables such as progress in Ukraine negotiations could serve as short-term volatility factors.

Whether a year-end rally materializes will hinge on next week's inflation data release as the key turning point.