Morning Market Snapshot – Thursday, December 11, 2025
U.S. equity futures are under pressure this morning as traders digest a rare combination of a fresh Federal Reserve rate cut and a sharp reset in AI enthusiasm after Oracle’s results. Futures tied to the Dow Jones Industrial Average are down about 0.1 percent, while S&P 500 futures are off roughly 0.5 percent and Nasdaq 100 futures are lower by about 0.8 percent, signaling a tech led pullback at the open.
The trigger is Oracle. The database and cloud giant announced earnings after the close that featured heavier than expected capital spending on AI data centers and softer guidance, which investors are reading as a sign that the payoff from hyperscale AI investments may take longer to materialize. Oracle shares are down more than 11 percent in premarket trading, dragging broader AI exposed names and Nasdaq futures with them.
This comes less than 24 hours after the Fed delivered its third consecutive 25 basis point cut, bringing the target range for the federal funds rate to 3.50 percent to 3.75 percent, while signaling a more data dependent pace from here. Equity indices responded positively on Wednesday with the Dow up about 1.05 percent, the S&P 500 gaining 0.67 percent, and the Nasdaq advancing 0.33 percent. The initial takeaway was that the Fed is comfortable easing into a slowing but still resilient economy, which generally supports risk assets.
Overnight, that optimism met a more cautious tone in cross asset markets. The U.S. Dollar Index is trading near 98.5 after sliding in the wake of the Fed decision, signaling easier financial conditions but also some concern about the long term value of dollar assets. Gold prices have slipped in Asian and early European trade as investors take profits following the Fed inspired spike, suggesting some rotation out of pure safety plays even as volatility in tech picks up. Crude oil is changing hands close to 58 dollars a barrel, roughly in the middle of its recent range, as traders weigh a softer dollar against demand concerns and evolving supply headlines.
On the micro side, the premarket tape is dominated by earnings and AI sensitive names. Ciena is trading sharply higher after a clean beat and strong guidance that highlight real demand for AI driven networking, while Oracle’s stumble has investors asking whether the AI buildout has overshot the near term opportunity. Broadcom, Costco, and Lululemon report later today, setting up an important read on both AI infrastructure and the health of higher end consumer spending into year end.
Heading into the opening bell, the battle line is clear. Bulls see a friendlier Fed and ongoing AI driven earnings growth. Bears see stretched valuations and the first cracks in the AI narrative. Today’s tape will show which side has the stronger grip on risk appetite.
Pre-Market News Catalysts (U.S. stocks)
- Oracle (ORCL) – Shares are down more than 11 percent in premarket trading after the company reported fiscal Q2 results that featured a large upward revision in capex for AI data centers and guidance that fell short of elevated expectations. The combination has reignited concerns about an AI bubble and an overbuild in cloud infrastructure, pressuring other AI exposed tech names and Nasdaq futures.
- Ciena (CIEN) – The optical networking firm is trading roughly 6 percent higher premarket after reporting adjusted EPS of 0.91 dollars versus expectations around 0.77 dollars and revenue of 1.35 billion dollars versus 1.29 billion dollars expected. Management highlighted strong AI and cloud related demand, with optical segment revenues up sharply year over year and guidance pointing to continued momentum.
- NextTrip (NTRP) – This smaller cap travel and tech name is up about 14 percent in early trading, making it one of the more notable premarket gainers in the information technology cohort. The move comes on the back of speculative interest rather than a single dominant headline, underscoring the risk seeking behavior that still exists on the fringes of the market despite broader index weakness.
- Radcom (RDCM) – Shares are down almost 24 percent premarket, putting it among the biggest decliners after the company fell out of favor with traders in the same tech complex that is nervously reassessing AI and network infrastructure spending following Oracle’s results.
The Day’s Debate (The Bull vs. Bear Case)
The Bull Case:
Bulls come into today with a simple argument. The macro backdrop just improved and the market is overreacting to a single AI related disappointment. From their perspective, the Fed’s third straight 25 basis point cut to a 3.50 percent to 3.75 percent funds rate confirms that policymakers see room to ease without fearing a sudden inflation resurgence. Wednesday’s rally across the Dow, S&P 500, and Nasdaq is taken as evidence that equity investors broadly welcome the shift to easier policy, especially since the Fed framed the move as an adjustment to slower growth and a softer labor market rather than a response to acute stress.
On the cross asset side, the slide in the dollar index toward the high 98s and the bid in gold after the decision are interpreted as a reset toward looser financial conditions that should support risk assets and corporate earnings multiples. Fed watchers also note that futures still price in some probability of further easing in 2026, giving growth and tech names a valuation cushion.
At the sector level, bulls argue that Oracle’s AI spending shock is more about capital allocation and timing than a structural demand problem. They point to Ciena’s results, which show double digit revenue growth and a clear AI tailwind in optical networking, as proof that real economy AI infrastructure demand is ramping. Analysts covering Broadcom expect Q4 revenues near 17.5 billion dollars and EPS growth above 30 percent year over year, supported by roughly 10 billion dollars of AI orders from a new customer. That is framed as evidence that AI capex is becoming more diversified and not solely dependent on a single hyperscale provider.
Finally, earnings due from consumer bellwethers like Costco and high end apparel names such as Lululemon offer bulls a chance to demonstrate that the U.S. consumer is still willing to spend, even with higher rates and inflation in the rear view mirror. If jobless claims later this morning remain contained and trade data do not signal a sharp slowdown, the bullish view is that any tech led dip could be a buying opportunity rather than the start of a deeper correction.
The Bear Case:
Bears see something different in the same data. For them, Oracle’s double digit premarket plunge is a flashing warning sign that AI spending excesses are starting to collide with investor patience. The company’s decision to boost fiscal 2026 capex by roughly 15 billion dollars above previous plans, combined with cloud contract bookings and revenue guidance that undershot lofty expectations, is interpreted as a classic late cycle pattern in which companies chase growth with heavy investment just as returns begin to normalize.
That concern does not stop with Oracle. Pre market weakness in Nvidia, Microsoft, AMD and other AI exposed peers as reported by early trading desks is seen as confirmation that investors are using the headline to de risk across the AI complex. Bears note that some of these names, including Broadcom, have posted gains of 70 percent to 180 percent year to date. Recent analysis that describes Broadcom as “primed for disappointment” ahead of tonight’s earnings underscores skepticism about how much good news is already priced in.
Macro bears emphasize that the Fed’s latest cut comes with a more cautious tone. The central bank may have lowered rates, but it also signaled a higher bar for additional easing and acknowledged pockets of labor market weakness. That combination fits a late cycle narrative where growth decelerates even as policy support becomes more constrained. The drop in the dollar index and the choppy action in gold and other metals are reframed not as friendly conditions, but as signs that currency markets are beginning to question the long run attractiveness of U.S. assets.
In fixed income and commodities, bears highlight that lower yields, a softer dollar, and oil prices oscillating near the high 50s have not produced a convincing breakout in cyclical risk assets. That is read as waning confidence in the durability of the expansion. With weekly jobless claims and trade data due today, any downside surprise could reinforce the idea that the Fed is cutting into weakness, not strength. In this framing, today’s tech led pullback is not a blip, but an early stage rotation away from crowded AI trades and toward a more defensive stance.
The Strategic Takeaway
The most important thing to keep in mind this morning is that the market is trying to reprice two big stories at once. On one side sits a friendlier Fed that has now delivered three cuts and clearly wants to avoid choking off growth. On the other side sits an AI trade that has generated spectacular returns and is now experiencing the first serious test of investor conviction after a major player signaled that the road to monetizing massive AI capex will not be straight.
For tactical traders, that means today’s open is less about whether indices finish green or red and more about how the underlying relationships behave. If Oracle’s slide remains relatively contained while names like Ciena, Broadcom, and other infrastructure beneficiaries hold up, the market can tell itself that this is a company specific reset. If, however, selling broadens into the mega cap AI leaders and leaks into consumer bellwethers ahead of earnings, it would support the view that the AI and rate cut narratives have become too stretched.
In short, watch how the market trades around AI, not just where the indices close. That is where the real information is hiding.
Upcoming Session Outlook with Directional Bias
Heading into the U.S. cash open, the weight of the evidence points to a cautious, tech heavy pullback rather than outright panic. Futures are lower across the board, with the Nasdaq underperforming as Oracle’s disappointment spills over into other AI themed stocks, yet broader macro indicators such as a softer dollar, contained gold prices, and oil trading near recent averages suggest that investors are not racing for the exits across all asset classes. The Fed’s rate cut and the still positive performance of major indices on Wednesday continue to provide a fundamental cushion, especially if today’s jobless claims and trade numbers land in line with expectations.
At the same time, the concentration of downside in a single theme highlights how crowded the AI trade has become. Markets are likely to probe how much pain investors are willing to tolerate in names that have delivered triple digit gains this year. The intraday tone around Oracle, Ciena, Broadcom, and the mega cap AI leaders will give an early read on whether dip buyers are still confident enough to step in quickly.
Putting it all together, the expected tone at the open is risk off but not disorderly. Directional bias: Slightly Bearish.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. The information provided is a synthesis of publicly available data and expert analysis and should not be considered a recommendation to buy or sell any security. Investing in the stock market involves risk, including the possible loss of principal. Past performance is not indicative of future results. Readers should consult with a qualified financial advisor to determine an investment strategy that is suitable for their own personal financial situation and risk tolerance.
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