Markets Overview

  • ASX SPI 200 futures up 1.1% to 8,687.00
  • S&P 500 up 0.2% to 6,901.06
  • Dow Average up 1.4% to 48,739.19
  • Aussie down 0.1% to 0.6666 per US$
  • US 10-year yield fell 1.1bps to 4.1371%
  • Australia 3-year bond yield fell 9 bps to 4.11%
  • Australia 10-year bond yield fell 8.9 bps to 4.72%
  • Gold spot up 1.0% to $4,272.42
  • Brent futures down 1.2% to $61.47/bbl

Economic Events

Buyers emerged for US stocks after concerns on Oracle Corp.’s plans for vast capital outlays on artificial-intelligence infrastructure drove a broad retreat from risky assets.

The S&P 500 clawed back losses to climb 0.2%, a closing record and back near October’s intraday peak. Blue-chip and small-cap gauges, long laggards in the tech-led equity bull run, climbed to all-time highs. The Nasdaq 100 pared a 1.6% drop, though sentiment for tech stocks remained sour after a disappointing earnings report for Oracle, a bellwether of the AI investment boom. Traders will get another read on the strength of the AI trade when Broadcom Inc. reports after the close.

Caution toward AI heavyweights persisted, with Nvidia Corp. fallin 1.5% amid Magnificent Seven losses. Bitcoin pared a drop after dipping below $90,000. The dollar ticked lower.

Broadcom’s stock has more than doubled from its April low, and Bloomberg Intelligence expects results that are in line with, or slightly above, estimates as hyperscaler customers continue to ramp up spending.

Oracle’s results pushed worries about tech valuations and whether heavy spending on AI infrastructure will pay off back into focus, reviving concerns that fueled weeks of volatility in November. While the sector has powered the S&P 500’s stunning rally this year, spending fears have prompted some investors to rotate into other areas as the US economic outlook remains robust.

“Markets have grown far more wary of AI-related spending, which is a sharp contrast with mid-2025 when anything hinting at higher capex sparked excitement,” said Susana Cruz, a strategist at Panmure Liberum. “Oracle has been the weakest link in all this, largely because it’s funding a big chunk of its investment with debt.”

Oracle’s earnings landed after the S&P 500 closed just shy of a record on Wednesday, lifted by a Federal Reserve interest-rate cut and Chair Jerome Powell’s sanguine economic outlook.

Investors had taken comfort in Fed policymakers leaving the door open to more easing next year, even though the quarter-point cut drew three dissents. Traders stuck to bets on two cuts in 2026, even as the Fed’s new projections signaled only one such move.

“The effect of Oracle has been greater than the Fed. This already tells us everything as we’ve been witnessing a strong concentration and one theme — AI — leading the market,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “This doesn’t mean that AI is gone or it’s a bubble, but we need to focus on a wider scale.”

US Treasuries rallied after the rate cut was paired with the authorization of fresh bill purchases to rebuild bank reserves. The gains continued after initial jobless claims rose more than expected in the Dec. 6 week, but waned in late afternoon trading as the yield on the 10-year note steadied at 4.15%.

Powell suggested that the Fed had now acted sufficiently to help stabilize the labor market while leaving rates high enough to continue weighing on price pressures. Officials upgraded their median outlook for growth in 2026, to 2.3% from the 1.8% they projected in September. They also foresaw inflation declining to 2.4% next year, from the 2.6% in the previous projection.

“The Fed’s ‘hawkish-but-bullish’ cut last night reinforces this: stronger 2026 growth, faster disinflation,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Cuts are continuing, but they’re no longer automatic — and that’s usually a constructive backdrop for equities.”

In commodities, oil retreated tracking wider losses in risk assets. Silver extended an all-time high past $63 an ounce.