Stocks edge higher after Powell’s wait-and-see message, as tensions ease in the Middle East

Asian markets posted modest gains Wednesday, following Wall Street’s rally and signs of easing geopolitical tensions in the Middle East. Investors are now shifting their focus to the Federal Reserve and the potential impact of tariffs and oil prices on the global economy.

In testimony to Congress on Tuesday, Federal Reserve Chair Jerome Powell signaled that the Fed is in no rush to cut interest rates — a stance that contrasts sharply with former President Donald Trump’s calls for immediate action.

“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said before the House Financial Services Committee.

Oil Prices Bounce Back, but Remain Below Pre-Conflict Levels

Oil prices rebounded slightly early Wednesday after tumbling roughly 6% on Tuesday. The drop followed a fragile but holding ceasefire between Israel and Iran, easing fears that the conflict might disrupt global oil supplies.

• U.S. crude rose 1.2% to $65.16 a barrel
• Brent crude added 1.1%, reaching $66.95

Despite the slight uptick, oil remains cheaper than it was before the conflict erupted nearly two weeks ago — good news for consumers and central bankers trying to rein in inflation.

“Easing stress in energy markets is excellent news for everyone who doesn’t want to see higher oil prices translating into accelerating inflation and tighter monetary policy,” said Ipek Ozkardeskaya of Swissquote Bank.

Asian Markets Follow Wall Street’s Lead

Investor confidence seems to be rebounding. After Trump announced the Israel-Iran ceasefire, global markets rallied. On Tuesday, the S&P 500 surged 1.1%, climbing back within 0.8% of its record high from February. The Dow Jones jumped 1.2%, and the Nasdaq added 1.4%.

That momentum carried over to Asian trading early Wednesday:

• Japan’s Nikkei 225: +0.3% to 38,917.08
• Hong Kong’s Hang Seng: +0.9% to 24,386.59
• Shanghai Composite: +0.5% to 3,437.10
• South Korea’s Kospi: +0.2% to 3,110.19
• Australia’s S&P/ASX 200: +0.1% to 8,562.90
• Taiwan’s Taiex: +1.1%
• India’s Sensex: +0.7%
• Thailand’s SET: -0.4%

“The world can now move on to face other difficult choices like tariffs and things like that,” said Frances Lun, CEO of GEO Securities in Hong Kong. “The market is well on its way to rebound and could again reach new levels.”

Fed Remains Cautious Amid Tariff Uncertainty

While the ceasefire and falling oil prices are calming markets, the Federal Reserve is keeping a close eye on another wildcard: tariffs.

The Fed has made it clear that it’s not ready to act until it sees more data on how the recently imposed tariffs — part of Trump’s broader economic strategy — will impact inflation and growth. Tuesday’s consumer confidence report came in weaker than expected, though inflation remains only slightly above the Fed’s 2% target.

Currency Markets

In currency trading:

• The U.S. dollar rose to 145.10 Japanese yen from 144.93 yen
• The euro edged up slightly to $1.1617 from $1.1610

Source: AP News – Asian shares gain as investors shift focus to Federal Reserve, tariffs

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The nickname reflects a pattern markets have come to expect: Trump threatens stiff tariffs, financial markets react, and then—more often than not—he backs down. For savvy investors, these “TACO” moments have become opportunities to profit from the volatility.

But when asked about the nickname during an Oval Office press conference, Trump didn’t take it lightly.

“Don’t ever say what you say, that’s a nasty question,” he snapped at a reporter. “To me that’s the nastiest question.”

Trump insisted his trade strategy is more about toughness than retreat, arguing he’s often accused of being too aggressive, not soft.

“They will say, ‘Oh, he was chicken, he was chicken,’ that’s so unbelievable,” Trump said, defending his decision to delay tariffs on the European Union. “I usually have the opposite problem — they say you’re too tough!”

Markets Ride the TACO Wave

The phrase “TACO” was first coined by the Financial Times, and it’s quickly become Wall Street slang for a familiar Trump tactic: talk tough on tariffs, spook the markets, then backpedal before real damage is done.

Take his “Liberation Day” tariff blitz, for example. Trump initially declared sweeping global tariffs, only to scale them back to a modest 10 percent within a week.

His retaliatory tariffs on China followed a similar arc—announced at a dramatic 145 percent, but ultimately trimmed to the same 10 percent baseline after both nations reached a deal.

More recently, Trump floated a 50 percent tariff on European Union goods, only to reverse course days later by pushing the decision deadline to July.

The Bottom Line

While Trump may bristle at being called out, Wall Street has learned to read between the lines. His dramatic tariff threats often end in de-escalation, giving traders a roadmap for short-term gains in uncertain times. Whether it’s called strategy or backpedaling, “TACO” has stuck—and markets are eating it up.

Source: POLITICO – Trump’s not happy about Wall Street’s name for tariff flip-flops

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Chinese regulators have put a sudden hold on a major deal involving two key ports in the Panama Canal zone, delaying what was expected to be a swift closing next week. The move comes as China’s State Administration for Market Regulation launches an antitrust investigation into the transaction, citing the need to protect fair competition and safeguard public interest.

The deal, spearheaded by US investment giant BlackRock, involves acquiring Hong Kong-based CK Hutchison’s controlling interest in 43 ports worldwide, spanning 199 berths across 23 countries. The acquisition was seen as a strategic move to ease tensions in the region, but China’s regulatory intervention has now cast uncertainty over its completion.

In response to the investigation, CK Hutchison has decided to postpone the official signing of the Panama ports agreement, according to a report from the South China Morning Post. Neither BlackRock nor CK Hutchison have issued immediate comments on the delay.

Former President Donald Trump has repeatedly and incorrectly claimed that China controls the Panama Canal—when in fact, Panama itself manages the waterway, while Chinese companies own ports on both ends. Trump has even suggested that the United States should retake control of the canal, adding another layer of geopolitical tension to the situation.

The timing of China’s regulatory move coincides with escalating economic tensions between Washington and Beijing. The Trump administration recently imposed a 20% tariff on all Chinese imports, prompting retaliatory pressure from China. Further tariff announcements are expected in the coming days, adding to the growing trade dispute.

The Panama Canal, a 51-mile passage connecting the Atlantic and Pacific Oceans, is an essential global trade artery. It handles roughly 4% of the world’s maritime trade and facilitates over 40% of US container traffic. Beyond commercial use, it also serves as a crucial route for military ships.

Originally built by the United States and completed in 1914, the canal was under US control for most of the 20th century. However, in a controversial treaty brokered by the Carter administration, control was transferred to Panama in 1999, despite opposition from many Republicans at the time. Today, the canal remains a cornerstone of Panama’s economy, generating nearly $5 billion in annual profits and contributing 23.6% of the country’s total income, according to a December 2024 study by IDB Invest.

Trump’s administration has been vocal about reducing Chinese influence in Panama. National Security Adviser Mike Waltz revealed last month that discussions were underway to address concerns over Chinese-controlled ports near the canal. Additionally, Trump has demanded that Panama waive fees for American vessels transiting the waterway, a request that has sparked controversy.

During a recent trip to Panama, Secretary of State Marco Rubio supported the idea, arguing that the US should not be required to pay fees to access a passage it would be responsible for defending in times of conflict. His remarks highlight the broader strategic importance of the canal and the ongoing geopolitical tug-of-war between global powers.

With China’s investigation now in motion, the future of the BlackRock-led deal remains uncertain. The delay underscores the growing complexity of US-China relations, where economic, strategic, and political interests continue to collide on the global stage. As tensions escalate, the fate of the Panama Canal’s ports will likely remain a focal point in broader discussions about trade, security, and geopolitical influence.

Source: CNN – Panama Canal ports sale has been put on hold by Chinese regulators

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Banking Error Credits Customer with Trillions

Citigroup mistakenly credited $81 trillion to a customer’s account instead of the intended $280, highlighting ongoing operational challenges within the bank. The error, which occurred in April 2023, took hours to be detected and reversed, according to a report by the Financial Times on Friday.

How the Mistake Happened

The massive transaction error slipped through multiple layers of oversight:

• A payments employee initially missed the mistake.
• A second official, responsible for reviewing the transaction, also failed to catch the error before it was processed.
• A third employee finally identified the issue 1.5 hours after processing, leading to a reversal several hours later.

No Funds Left the Bank

While the mistake was alarming, no money actually left Citi. The bank reported the incident to both the Federal Reserve and the Office of the Comptroller of the Currency (OCC) as a “near miss”—a term used when a bank processes the wrong amount but successfully recovers the funds.

In a statement to Reuters, Citigroup assured that its “detective controls“ quickly flagged the error, leading to an immediate correction. The bank emphasized that neither the client nor Citi suffered any financial impact from the mistake.

Recurring Near Misses at Citi

This wasn’t an isolated incident. Internal reports reveal that in 2023 alone, Citi recorded 10 near misses involving $1 billion or more, down slightly from 13 cases in 2022.

Despite declining to comment on these figures, Citi acknowledged its ongoing investment in improving compliance, risk management, and data governance.

Citi’s History of Regulatory Fines

Citigroup has faced significant regulatory penalties for its operational shortcomings:

• July 2023: Fined $136 million for slow progress in fixing compliance issues.
• 2020: Hit with a $400 million fine for risk and data failures.

Citi’s CFO, Mark Mason, recently stated that the bank is prioritizing technology upgrades and better regulatory reporting to prevent such errors in the future.

The Bigger Picture

The $81 trillion mistake serves as a stark reminder of the risks in high-volume financial transactions. It underscores Citi’s ongoing struggle to improve oversight while managing its complex banking operations.

With regulators watching closely, Citigroup’s ability to strengthen its compliance systems will be crucial in avoiding future banking blunders of this scale.

Source

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News from China disrupted U.S. markets on Monday, sending shockwaves through the tech sector and unsettling the frenzy around artificial intelligence (AI).

A Chinese company, DeepSeek, announced the development of a large language model (LLM) capable of competing with U.S. AI giants—at a fraction of the cost. Despite U.S. government restrictions on Chinese access to advanced AI chips, DeepSeek surged to the top of the Apple App Store’s free apps chart, stunning analysts and investors.

The announcement triggered significant declines for tech stocks like Nvidia, Broadcom, and Alphabet (Google’s parent company). Meanwhile, the broader market saw mixed results, with some sectors gaining despite the tech slump.

Let’s break down the numbers to understand DeepSeek’s impact on the financial markets.

Key Stats from Monday’s Market Shake-Up

5.6%

• Decline in the S&P 500 tech sector, marking its worst single-day drop since September 2020.
• Notably, Nvidia was one of eight tech stocks in the sector to post double-digit losses.
• Without Apple’s 3% gain, the index’s decline would have been even sharper.

$590 Billion

• The approximate decline in Nvidia’s market value, equivalent to more than the combined market value of Home Depot and Lowe’s.
• Despite the drop, Nvidia still holds an impressive market cap of approximately $2.9 trillion.

$27.6 Billion

• The amount Oracle CEO Larry Ellison’s net worth fell after the selloff, per the Forbes Real-Time Billionaires list.
• Last week, Ellison’s fortune surged after Donald Trump announced a $500 billion AI infrastructure partnership involving Oracle, OpenAI, and SoftBank.
• Nvidia CEO Jensen Huang also saw his net worth tumble by $20.8 billion, settling at $103.6 billion.

28.3%

• The decline in Vistra Corp.’s stock, the biggest drop for any stock in the S&P 500.
• Vistra, an independent power producer, had soared last year due to expectations that U.S. AI infrastructure would drive significant demand for power.

351 Stocks

• The number of S&P 500 stocks that rose on Monday despite the sharp drop in the index.
• The decline highlights the outsized influence of tech stocks like Nvidia on the overall index.
• The Dow Jones Industrial Average, which has less emphasis on tech, managed to close with a modest gain.

What Does This Mean for Investors?

DeepSeek’s rise has sent a clear message: China is a formidable competitor in AI development, and its advancements can shake the dominance of U.S. tech giants. The volatility in the market underscores the heavy reliance on a few key players in the tech sector, making the broader market vulnerable to disruptions tied to these companies.

While the S&P 500 tech sector suffered, other parts of the market—especially those with less exposure to AI hype—saw gains. Investors should take note of these shifts as the global AI race accelerates.

Key Takeaways

• DeepSeek’s announcement rattled U.S. markets, challenging the dominance of American AI firms.
• Nvidia, Alphabet, and Broadcom saw significant declines, dragging down the S&P 500 tech sector.
• The broader market showed resilience, with more than 350 S&P 500 stocks rising despite the tech selloff.
• DeepSeek’s success, despite U.S. chip restrictions, raises questions about the future of global competition in AI.

Source

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For the first time since the presidency of Jimmy Carter, the Dow Jones Industrial Average is in the midst of its longest losing streak in over four decades. On Tuesday, the Dow dropped 267 points, or 0.6%, marking its ninth consecutive day of losses.

This is the Dow’s longest losing streak since February 1978, according to FactSet data. However, despite this setback, the market’s recent downturn has been relatively mild. Over the past eight trading days, the Dow has only lost 3%—a small dip in the broader market landscape.

Notably, these losses have primarily affected the Dow, while other major indices have shown resilience. The Nasdaq, driven by the booming tech and AI sectors, remains strong, although it closed Tuesday down by about 0.32%. Similarly, the S&P 500 ended the day down around 0.39%.

Keith Lerner, co-chief investment officer at Truist Advisory Services, describes the market behavior as “quirky.” He explains that money continues to flow into technology stocks, with artificial intelligence and tech innovation taking center stage as the dominant market theme.

A Key Factor in the Dow’s Drop: UnitedHealthcare

A significant contributor to the Dow’s recent losses is UnitedHealthcare, which has seen its stock value plummet by 18% this month alone. This decline was triggered by the tragic shooting of CEO Brian Thompson, and worsened by remarks from President-elect Donald Trump, who vowed to “knock out” drug-industry middlemen. As a result, the insurance giant’s stock continued to slide, including a further drop on Monday.

The Fed’s Upcoming Interest Rate Decision

The Dow’s recent losses come just ahead of the Federal Reserve’s interest rate decision on Wednesday. While most analysts expect the Fed to cut rates by a quarter-point, there’s speculation that they may signal a slower pace of rate cuts in 2025.

Despite the recent downturn, the Dow remains up 16% for the year, continuing to reflect a strong 2024 overall. It’s also about 1,500 points, or 3.5%, higher than it was on Election Day, buoyed by investor optimism following the avoidance of post-election uncertainty and the promise of tax cuts and regulatory relief under President Trump.

Looking Ahead: Caution and Optimism

Keith Lerner notes that after the election, investors focused mostly on the positive aspects of President Trump’s policies, but next year, they will need to consider both the potential upsides and risks, including concerns about escalating tariffs and mass deportations.

Interestingly, the Dow hasn’t experienced a losing streak of 10 days or more since a prolonged 11-day slump in 1974, according to FactSet. However, not all market analysts are concerned about the recent dip.

Anthony Saglimbene, chief market strategist at Ameriprise, believes the current losing streak doesn’t signal a looming crisis. Instead, he attributes it to profit-taking after recent strong gains. He also notes that expectations around the risks and opportunities tied to the incoming Trump administration are shifting, particularly regarding the effectiveness of a potential second term in driving growth.

In conclusion, while the Dow’s nine-day losing streak may raise some eyebrows, analysts suggest that it’s more of a market correction than a precursor to broader economic trouble. Investors are keeping a close eye on what comes next, especially in light of political developments and the Fed’s upcoming decision.

Source

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Oracle Corporation (NYSE: ORCL) is expected to see significant price appreciation, according to Guggenheim. The investment firm recently raised its price target for Oracle’s stock from $200 to $220, signaling a potential upside of 18.13% from its latest closing price. Guggenheim also reiterated its “buy” rating on the stock, reinforcing confidence in the enterprise software provider’s performance.

Analyst Ratings on Oracle Stock

Other analysts have also expressed optimism about Oracle:

• DA Davidson increased its price target from $105 to $140, maintaining a “neutral” rating.
• Sanford C. Bernstein raised its target from $201 to $202 with an “outperform” rating.
• StockNews.com upgraded Oracle from “hold” to “buy.”
• KeyCorp upped its price target from $190 to $200 and rated the stock as “overweight.”
• Oppenheimer maintained a “market perform” rating.

In total, 19 analysts have rated Oracle as a “buy,” while 11 have given it a “hold.” According to MarketBeat data, Oracle has a consensus rating of “Moderate Buy” and an average target price of $171.52.

Stock Performance

On Thursday, Oracle’s stock closed at $186.24, reflecting a $1.95 drop during the day’s trading. The company traded 6.09 million shares, below its average volume of 8.25 million. Key financial metrics include:

• Market Cap: $516.08 billion
• Price-to-Earnings Ratio (P/E): 48.00
• Price-to-Earnings-Growth Ratio (PEG): 3.37
• Beta: 1.03

The stock’s 52-week range spans from a low of $99.26 to a high of $196.04. Oracle’s 50-day moving average stands at $178.90, while its 200-day moving average is $153.32.

Financial Results

Oracle reported strong earnings for the quarter ending September 9th:

• Earnings Per Share (EPS): $1.39, surpassing the consensus estimate of $1.33.
• Revenue: $13.31 billion, slightly exceeding analyst expectations of $13.23 billion.
• Year-over-Year Growth: Revenue increased by 6.9%.

The company’s net margin was 20.40%, and its return on equity reached an impressive 171.38%. Analysts expect Oracle to achieve an EPS of $5.00 for the current fiscal year.

Insider Activity

Oracle’s Executive Vice President Maria Smith recently sold 6,320 shares at an average price of $165, totaling $1.04 million. After the sale, she retained 42,889 shares valued at approximately $7.08 million. The transaction, disclosed via the SEC, reflects a 12.84% reduction in her holdings.

Currently, 42.20% of Oracle’s stock is owned by insiders.

Institutional Investments

Institutional investors have shown strong interest in Oracle, with notable activity in the third quarter:

• Oddo BHF Asset Management Sas acquired a new stake worth $1.24 million.
• Capasso Planning Partners LLC invested $207,000 in Oracle shares.
• Inspire Trust Co. N.A. increased its holdings by 11.7%, now owning 30,729 shares valued at $5.24 million.
• Franklin Resources Inc. boosted its stake by 11.6%, holding 18.48 million shares worth $3.37 billion.

In total, institutional investors own 42.44% of Oracle’s stock.

About Oracle Corporation

Oracle Corporation provides a wide range of enterprise IT solutions globally. Its cloud offerings include:

• Enterprise Resource Planning (ERP): Oracle Fusion Cloud
• Performance Management: Oracle Fusion Cloud
• Supply Chain and Manufacturing Management
• Human Capital Management
• Healthcare Solutions: Oracle Cerner
• Marketing and Advertising Platforms
• NetSuite Applications Suite

With its diverse portfolio, Oracle continues to be a leading provider in the enterprise software industry.

Source

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NEW YORK (AP) — U.S. stocks ended with mixed results on Wednesday as a recent inflation report raised expectations of an interest rate cut by the Federal Reserve next month.

The S&P 500 was nearly flat, inching up less than 0.1%, following its first decline since last week’s post-Election Day rally. Meanwhile, the Dow Jones Industrial Average gained 47 points, or 0.1%, and the Nasdaq composite slipped by 0.3%.

Bond Market Reaction and Rate-Cut Expectations

The bond market also showed mixed results. Consumer inflation increased from 2.4% to 2.6%, as economists expected. However, “core inflation” (which excludes volatile categories like food and energy) remained steady, an indicator of long-term trends that economists say is more predictive. This stability strengthened expectations for a December rate cut.

“Bang in-line core inflation leaves the Fed on track to cut rates in December,” said Lindsay Rosner, head of multi-sector fixed income at Goldman Sachs Asset Management.

Since September, the Federal Reserve has gradually reduced interest rates from a two-decade high to support the job market and bring inflation near its 2% target. After the last rate cut in October, traders now see an 80% chance of a third cut in December, according to CME Group data.

Following the inflation report, the yield on the two-year Treasury fell to 4.27% from 4.34% on Tuesday. The 10-year Treasury yield, influenced by long-term growth expectations, initially dropped but eventually rose slightly to 4.45%.

Uncertainty for 2025 and Potential Economic Changes

Looking forward, questions remain regarding the Fed’s plans for 2025. Previous Fed forecasts indicated potential further rate cuts into next year, but Donald Trump’s recent election victory may change that trajectory. Trump’s support for lower taxes, higher tariffs, and reduced regulation could lead to increased government debt, higher inflation, and accelerated economic growth, potentially altering rate cut plans.

“While lower rates can boost the economy and stock prices, they can also fuel inflation,” noted Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “The market may be at an inflection point, with inflation potentially turning upward.”

Stock Highlights

On Wall Street, Rivian Automotive surged 13.7% after it shared more details about its joint venture with Volkswagen Group, which could reach a total size of $5.8 billion, exceeding prior estimates.

In contrast, Spirit Airlines stock fell 59.3% after the company filed for debt renegotiation, which, if successful, could affect shareholder equity but protect employees and customers.

By the end of trading, the S&P 500 rose 1.39 points to close at 5,985.38. The Dow gained 47.21 points, reaching 43,958.19, while the Nasdaq declined by 50.66 points to finish at 19,230.74.

Global Markets and Cryptocurrency Movements

Internationally, Japan’s Nikkei 225 dropped 1.7% following a surge in wholesale inflation to its highest level since July 2022. South Korea’s Kospi fell 2.6%, affected by a significant decline in Samsung Electronics shares.

In the cryptocurrency space, Bitcoin crossed above $93,000 before pulling back below $90,000. President Trump has embraced cryptocurrencies, pledging to make the U.S. the global crypto capital. Meanwhile, Dogecoin (favored by Tesla’s Elon Musk) also pared earlier gains after Trump appointed Musk to head the “Department of Government Efficiency,” or “DOGE” for short.

Source

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