🥽 Oracle's AI Reality Check Sends Tech Into Tailspin

Yesterday's Fed-fueled rally that pushed the S&P 500 within spitting distance of a new record? Consider it ancient history...

Author

Jason Paloma
December 11, 2025 • Estimated Reading Time: 13 minutes

😎 Market Vibes

🥽 Oracle's AI Reality Check Sends Tech Into Tailspin

Well, that didn't last long. Yesterday's Fed-fueled rally that pushed the S&P 500 within spitting distance of a new record? Consider it ancient history. Markets opened Thursday in retreat mode as Oracle dropped a reality bomb on Wall Street's AI dreams, with the S&P 500 opening slightly down, the Nasdaq slipping 0.7%, while the Dow - bless its old-school soul - managed to stay in the green, up 0.6%.

Oracle got absolutely obliterated, plunging 14% after reporting cloud revenue that missed estimates and casually announcing it's jacking up its capital spending by a cool $15 billion to hit $50 billion for 2026. Nothing says "we're totally confident in our AI strategy" quite like doubling down on data centers while your stock craters harder than a meteor hitting Earth. The ripple effects? Nvidia, AMD, and CoreWeave all caught the contagion, dropping 2-6% in sympathy.

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🚨 Fed's Rate-Cut Glow Fades Fast After Fresh Policy Signals

Remember the buzz when the Federal Reserve cut interest rates again yesterday? That excitement - from just hours ago - already feels like ancient history in market time. The Fed lowered its benchmark rate by 25 basis points to 3.50%-3.75%, the lowest level in over three years, marking the third consecutive cut in 2025.

But the shine dimmed quickly once traders dug into the details. The Fed's updated projections show a much more cautious path ahead - officials now signal only one more rate cut next year, down from earlier expectations of multiple future reductions. That's a clear shift away from the earlier narrative of sustained easing and toward a stance of wait and see.

Chair Jerome Powell repeatedly emphasized that policymakers are "well positioned to wait to see how the economy evolves," underscoring that future moves will depend heavily on upcoming data rather than pre-committing to more cuts.

In Fed-speak, that translates to: don't count on us to be your perpetual market booster. 

So while yesterday's rate cut sparked a rally, the broader message from the Fed is that the bar for future easing has risen, and markets may need to temper their expectations going into 2026.

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🎁 Jobless Claims Spike, But Holiday Noise Clouds the Signal

The Labor Department threw another curveball this morning with initial jobless claims jumping to 236,000 for the week ended December 6, up a hefty 44,000 from the prior week and well above the 223,000 consensus. Before you panic, remember last week included Thanksgiving, which tends to make economic data about as reliable as a weather forecast for next month.

California added 14,499 claims, Illinois chipped in 11,207, and New York contributed 10,600 - these are unadjusted figures that scream "holiday-related weirdness." Meanwhile, continuing claims plunged by 99,000 to 1.84 million, suggesting that whatever temporary disruptions happened aren't sticking around.

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📉 Bitcoin Buckles Below $90K (Again)

The crypto crowd is having a rough morning, with Bitcoin sliding below the psychologically critical $90,000 level to trade around $90,166. That's a 1.8% drop and marks yet another test of support at this key threshold. After flirting with six figures not too long ago, Bitcoin's been in a frustrating pattern of teasing bulls and punishing the overly optimistic.

Crypto-related stocks are feeling the pain too, with everything from Coinbase to MicroStrategy catching downdrafts. The sell-off looks more like a positioning shake-out than anything systemic, but it's definitely putting a damper on the speculative appetite that's been fueling high-beta trades lately.

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🤝 Gold Holds Steady While Everything Else Burns

In a market where tech stocks are getting hammered and crypto is wobbling, gold is doing what gold does best: sitting pretty. The yellow metal is trading around $2,712 per ounce, holding near its recent highs and reminding everyone why it's been humanity's go-to store of value for, oh, about 5,000 years.

Gold's up over 27% year-to-date, making it one of the best-performing assets of 2024-2025. With inflation still sticky, the Fed signaling a pause in rate cuts, and geopolitical tensions simmering (because when aren't they?), gold's appeal as a safe haven remains strong. Central banks continue buying aggressively, which tells you everything you need to know about institutional confidence in fiat currencies right now.

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🏰 Disney Makes $1 Billion Bet on AI Content

In a move that feels both futuristic and slightly terrifying, Disney just inked a $1 billion, three-year deal with OpenAI to license its content for use in ChatGPT maker's AI applications. This means OpenAI's video creation app Sora will be able to tap into more than 200 Disney characters, letting users create videos with Mickey, Elsa, and the whole gang.

This is the first-of-its-kind deal that could give OpenAI a massive edge in the AI content creation arms race. As pressure mounts to secure intellectual property to feed AI-powered applications, Disney just proved that if you can't beat 'em, charge 'em a billion dollars to join 'em. Disney shares were relatively flat on the news, suggesting Wall Street already priced in Disney's inevitability as an AI content kingmaker.

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🎬 Bottom Line

Wednesday's euphoria over the Fed's rate cut lasted about as long as a New Year's resolution, with Oracle's disappointing earnings snapping everyone back to reality. The tech sector got a harsh reminder that AI investments need to eventually turn into actual profits, not just bigger capex budgets. With the S&P flirting with all-time highs while Oracle faceplants 14%, we're seeing a market that's simultaneously optimistic about easy money and terrified about valuation justifications.

The Fed basically told us they're done being accommodative heroes, jobless claims are sending mixed signals thanks to Thanksgiving chaos, and Bitcoin is once again playing limbo with the $90K level. Gold's sitting pretty as the adult in the room, while crypto and AI enthusiasts duke it out over who's more delusional about future returns.

Keep your seatbelts fastened - this market has more mood swings than a teenager on social media, and Oracle just proved that even the darlings can stumble when reality checks start clearing.

🔥 What’s Heating Up This Week

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