Rally Extends on Fed Cut Even as Fears Linger, Futures Slip 11/12/2025

HOT stories for today

Market wrap:

• US equities climbed on Wednesday after the Federal Reserve delivered its third consecutive interest-rate cut and signaled that more easing could be possible next year. The Dow Jones Industrial Average rose 1.1%, gaining 497.46 points to close at 48,057.75. The S&P 500 added 0.7% to 6,886.68, briefly topping its prior record close of 6,890.89, while the Nasdaq Composite advanced 0.3% to 23,654.16. Policymakers lowered the federal funds rate by a quarter point to 3.5%–3.75% at the end of their two-day meeting. Chair Jerome Powell struck a mixed tone, cautiously dovish on inflation but clear that “a great deal of data” before January will shape the Fed’s next move.
• The Russell 2000 jumped as much as 1.5% to a fresh intraday record, driven by expectations that smaller companies will benefit disproportionately from lower borrowing costs. Bitcoin briefly surged above $94,000 following the announcement before retreating toward $90,081 as investors digested Powell’s messaging. However, despite the sizable rally so far, futures are trading sharply lower at the moment, suggesting markets may struggle for direction as Thursday’s session unfolds.

Rally Extends on Fed Cut, Doubts Persist

• The Fed’s latest rate cut reinforced confidence in a three-year equity rally that has persisted despite inflation concerns, a widening fiscal deficit and a softening labor market. Markets remain underpinned by strong corporate earnings, AI-driven momentum and expectations that President Donald Trump’s forthcoming tax-and-spending package will add fiscal fuel next year. Traders also assessed the potential for additional easing should Kevin Hassett replace Jerome Powell, though sentiment after Wednesday’s decision stayed cautiously optimistic.
• Risks remain, particularly as delayed government data could reveal deeper labor-market weakness or highlight stubborn inflation pressures. The Fed complemented its move with roughly $40 billion in Treasury-bill purchases to ease year-end funding strains, a technical step that nonetheless helped pull short-dated yields lower. And while Hassett has emphasized he would preserve the central bank’s independence, investors continue to watch for signs that a Trump-aligned Fed could tilt more dovishly than markets currently anticipate—a prospect that keeps inflation and stability concerns in the mix heading into 2026.

Stocks on the move:

• Oracle (ORCL): dropped about $10 in post-market trading, a reaction tied more to investor expectations than to its headline numbers. The company delivered $16.3 billion in revenue, roughly in line with forecasts, but the results weren’t enough to satisfy a market looking for clearer acceleration in cloud growth.
• Adobe (ADBE): edged higher after hours. The digital media leader beat expectations across the board, posting non-GAAP earnings of $5.45 per share on Q4 revenue of $6.2 billion, and offered strong fiscal 2026 guidance supported by continued monetization of its Generative AI tools.
• Synopsys (SNPS): also came in ahead of estimates, reporting adjusted EPS of $2.9 versus the $2.3 consensus. Revenue reached $2.26 billion, topping the $2.25 billion forecast and underscoring solid demand in electronic design automation.

Watchlist: SNPS, ADBE, ORCL, COIN, NVDA, IWM, MSFT, CIEN, AVGO

Key Economic Events Today:

EST time

08:30 am: USD Unemployment Claims, Trade Balance
10:00 am: USD Final Wholesale Inventories


Earnings

BMO ( Before Market Open): Cienna Corp. (CIEN), Manchester United (MANU)
AMC (After Market Close): Broadcom Inc. (AVGO), Costco (COST), Lululemon (LULU)



The TEFS Analyst team wishes you a successful day!