Show Notes
US stocks are little changed to start the week as investors wait on the Federal Reserve’s rate decision and a fresh read on the AI boom from Oracle and Broadcom. Futures point to a modestly higher open, with the Russell 2000 attempting to break out, while bond volatility and the VIX remain near year lows. Markets are pricing a roughly 90% chance that the Fed will cut rates by 25 basis points this week, even as inflation remains roughly a whole point above target and officials remain sharply divided on how quickly to ease. Several regional presidents may dissent over sticky prices, while Governor Steven Myron is likely to push again for a deeper 50 bp move.
The AI trade undergoes a key report from ORCL and Broadcom (AVGO). Stress test when Oracle (ORCL) and Broadcom (AVGO Oracle has slumped about 24% in two months as Wall Street worries about massive AI capital expenditures needs for a company without the cash machine of hyperscalers like Alphabet (GOOG) and Microsoft (MSFT), making it a “canary in the coal mine” for AI valuations. Broadcom, up nearly 70% year to date, continues to outpace the broader chip sector and is now being discussed as parNVDA).t of a “Mag 8” alongside Nvidia (NVDA Netflix’s (NFLX) $72 billion bid for Warner Bros. Discovery (WBD) faces new regulatory and political scrutiny after President Trump said the deal could be a problem, just as Paramount Global (PARA) raised its competing all-cash offer to $30 per share.
Berkshire Hathaway (BRK-B) is also in transition as longtime investment chief and GEICO CEO Todd Combs departs for JPMorgan (JPM), underscoring how incoming CEO Greg Abel is already reshaping the conglomerate’s leadership and structure ahead of Warren Buffett’s year-end exit. IBM (IBM) is acquiring Confluent (CFLT) for $9.3 billion to enhance its data-streaming and AI capabilities, while Tesla (TSLA) slides after a Morgan Stanley downgrade highlights growing dispersion within the once-unified "Magnificent Seven" trade.
Takeaways:
Fed expected to deliver a third 25 bp cut of the year amid unusually public division over inflation and growth
Oracle and Broadcom earnings seen as key tests of whether AI spending still justifies premium valuations
Netflix’s $72B Warner Bros. deal faces political pushback as Paramount lifts its rival's all-cash bid
Berkshire Hathaway loses top stock picker Todd Combs to JPMorgan as Greg Abel starts to put his stamp on the firm
IBM buys Confluent for $9.3B to bolster AI data streaming; Tesla downgraded as Mag 7 leadership begins to fragment
Yahoo Finance's flagship show, Morning Brief, is your go-to source for smarter investing and market moves.
Thoughts? Questions? Fan mail? Please email us at [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices
More from Morning Brief
Futures point lower as investors weigh cautious guidance from Walmart and rising geopolitical risk tied to Iran. Dow futures fall about 166 points, with the S&P 500 and Nasdaq 100 also in the red. Markets are watching consumer data and oil prices for the next signal.
Stocks are rebounding after another AI-driven sell-off, with housing starts and durable goods topping estimates despite December declines. Still, US equities are off to their worst relative start since 1995, as investors await the GDP report and reassess positioning.
Futures are lower after the holiday break, with Nasdaq 100 futures off about 0.7% as investors digest last week’s worst stretch since November. The AI transition remains the central driver, with traders watching earnings commentary and capital expenditures discipline for clarity.
US stocks are mixed premarket after a solid jobs report and a stronger earnings season. Investors are weighing resilient growth against fewer Fed rate cuts. Value is outperforming growth early in the year as traders reassess positioning.
Stock futures are higher after January payrolls rose 130,000 versus 65,000 expected, with unemployment ticking down to 4.3%. Dow futures are up 250 points as investors digest stronger labor data and push Fed rate cut odds to July. The key question now: does a resilient economy delay easing?