Fed Cuts Rates But Signals Pause, Oracle Stock Plunges on AI Fears

• In practice, markets are now pricing in a very low probability of another Fed rate cut in January unless labor market conditions deteriorate significantly.
• Sentiment around artificial intelligence stocks cooled after Oracle’s results raised concerns about near-term cash flow pressures.
• The race to acquire Warner Bros. Discovery took an unexpected turn. Paramount Skydance has launched a hostile takeover offer of $30 per share.

The Federal Reserve delivered its third straight and much-anticipated interest rate cut, lowering the fed funds target range by 25 basis points to 3.50% to 3.75% after a deeply divided policy meeting saw three officers who disagreed.

Gov. Stephen Miran supported a larger cut, while Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee voted to keep rates unchanged.

Federal Reserve Chairman Jerome Powell suggested that the easing cycle may now be on hold and stressed the need to gauge how the economy responds to cumulative interest rate cuts.