Market Summary
U.S. markets reacted to the Fed’s 25bp cut with a rally led by value and bank stocks while tech and AI names slid after mixed earnings. The S&P 500 and Dow flirted with record highs, the Nasdaq lagged amid software and chip weakness, bond yields fell and gold climbed as volatility ticked higher around AI and geopolitical headlines.
Disney struck a landmark deal with OpenAI, combining a $1 billion equity investment with multi-year licensing that opens 200+ characters to OpenAI’s Sora video tool. The pact signals media giants are monetizing IP while partnering with AI platforms to reach younger audiences.
Figure of the Day
25 bps – Federal Reserve cut policy rate by 25 basis points, marking the third straight cut in 2025.
OpenAI rolled out GPT-5.2 amid intense competition with Google, pitching material gains in professional tasks and agentic AI reliability. The launch aims to end a brief ‘code red’ scramble and reassure customers and investors about product leadership.
A wrongful-death lawsuit alleges ChatGPT contributed to a murder-suicide, exposing AI firms to fresh liability and regulatory scrutiny. The case raises urgent questions about content moderation, mental-health harms and legal responsibility for model outputs.
Bullish
Eli Lilly Drug Delivers Best‑In‑Class Weight Loss in Trial
Eli Lilly’s experimental obesity therapy produced outsized weight loss in late‑stage data, sending shares higher and bolstering the company’s leading position in the booming obesity market.
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Oracle’s quarterly report disappointed investors, spotlighting surging AI-related capex alongside softer cloud revenue and igniting fears about the AI spending bubble. The results knocked tech names lower and re‑priced risk across AI and data‑center trades.
The Federal Reserve delivered a 25bps cut for the third straight meeting but signalled internal divisions about the path forward. Markets cheered the easing while Fed messaging injected caution about additional moves next year.
Bearish
Waymo Recalls 3,000+ Vehicles Over School‑Bus Software Flaw
Waymo recalled thousands of self‑driving vehicles after software could let cars pass stopped school buses, raising safety, regulatory and liability concerns for autonomous‑vehicle deployments.
U.S. forces seized a sanctioned oil tanker off Venezuela, escalating tensions with Caracas as Washington tightens pressure on the Maduro regime. The action was followed by targeted sanctions on individuals and shipping firms tied to regime oil flows.
Rivian announced an in-house AI chip and autonomy roadmap as it pushes into robotaxi territory, a move that marks a strategic pivot away from Nvidia. The chip reveal spooked investors and triggered a sharp selloff in Rivian stock.
Regulatory Impact
Fed cut interest rates again and signalled a cautious pause; the CFTC withdrew 2020 ‘actual delivery’ crypto guidance; Treasury proposed a deregulatory refocus for the FSOC; and Washington tightened sanctions and enforcement on Venezuela oil shipping.
Senator Elizabeth Warren and other lawmakers blasted sales of advanced Nvidia chips to China, framing the transfers as national‑security risks. At the same time, Chinese tech buyers are reported to be placing large orders for H200 processors.
Beijing is pressing state-owned AI data centres to use domestic chips and has added homegrown processors to approved supplier lists. The policy accelerates China’s push to reduce reliance on US technology amid tight export controls and a growing AI infrastructure race.
Quote
Sells out American national security
— Sen. Elizabeth Warren
The Senate failed to pass competing health‑care fixes as the expiration of enhanced ACA subsidies nears, raising the prospect of higher premiums for millions. Lawmakers on both sides warned of short‑term turmoil and political fallout from an unresolved deadline.
Critics warned that President Trump’s preferred Fed chair picks risk politicising the central bank and disappointing expectations of a partisan-friendly tilt. Senators and analysts flagged independence concerns amid ongoing White House pressure on rate policy.
JPMorgan moved deeper into tokenization, creating a Solana-based USCP token and executing a commercial paper issuance on-chain. The deals mark a milestone for institutional crypto use and test regulatory and operational models for tokenized debt.
Regulators are rewiring crypto rules: the CFTC moved to withdraw older ‘actual delivery’ guidance while the Senate neared confirmation votes for key crypto regulators at the CFTC and FDIC. The steps could reshape enforcement and oversight for digital‑asset markets.
OPEC kept a bullish oil‑demand outlook even as the IEA trimmed surplus forecasts, while futures responded to signs of abundant supplies. The mix left crude prices pressured despite geopolitical flare‑ups in the Western Hemisphere.
Bank stocks caught up with broader market gains as the S&P and Dow eyed records, even while tech weakness held the Nasdaq back. Market breadth shifted toward cyclical and financial names amid the Fed’s rate cut and rotation out of expensive AI bets.
Treasury Secretary Scott Bessent proposed wide changes to the Financial Stability Oversight Council and pushed a deregulatory agenda to prioritise growth over prophylactic safeguards. The moves signal a White House tilt toward easing financial oversight and prompt industry debate.
Ukraine’s president floated a referendum on territorial concessions as negotiators explore compromises to end the war, while the U.S. proposed a Donbas ‘free economic zone’ to sweeten any deal. The developments mark a dramatic turn in diplomatic options under consideration.
The EU is tightening foreign investment screening to counter geopolitical threats and better police strategic takeovers. A European cloud trade group also publicly criticized the EU’s handling of the VMware‑Broadcom merger approval, saying regulators missed key risks.
