Global Markets React to Fed Rate Cut

Oracle's shares plummeted over 10% in after-hours trading following the company's quarterly earnings report, which failed to alleviate concerns about an AI bubble. Despite a 14% revenue growth and a 68% surge in sales at its AI business, Oracle Cloud Infrastructure (OCI), the company's revenue fell short of Wall Street expectations. Oracle's chairman and CTO, Larry Ellison, struck a cautious tone, emphasizing the need for agility in response to changing AI technology. The company's massive deal with OpenAI and increased debt have raised concerns among investors about overexposure and the potential bursting of the AI bubble.

Asia-Pacific markets mostly declined on Thursday after the Federal Reserve's third rate cut of the year, despite initial gains. The Fed reduced the Federal Funds rate by 25 basis points to 3.5%-3.75% and signaled a pause in easing. Fed Chair Jerome Powell stated that the reduction puts the Fed in a comfortable position to wait and see how the economy evolves. The U.S. dollar index fell to its weakest level since October 21. Japan's Nikkei 225 and South Korea's Kospi both ended lower, while Australia's S&P/ASX 200 inched up. The Fed also announced it would resume buying $40 billion in Treasury bills, and removed language stating that the labor market 'remained low', indicating a shift in focus towards supporting the economy.

European stocks opened slightly lower on Thursday as investors reacted to the U.S. Federal Reserve's latest rate cut and commentary. The Fed trimmed the Federal Funds rate by 25 basis points to 3.5%-3.75% but signaled a tougher road ahead for further reductions. Fed Chair Jerome Powell stated that the reduction puts the Fed in a comfortable position to wait and see how the economy evolves. Global markets are reacting to the Fed's third interest rate cut of the year, with Asia-Pacific markets trading mostly lower overnight and S&P and Nasdaq futures falling Wednesday night.

The article argues that Chris Waller, not Kevin Hassett, should be the next chair of the Federal Reserve. President Trump has hinted at nominating someone early next year and betting markets favor Kevin Hassett, a trusted economic adviser to Trump. The article suggests that Hassett is too partisan and would likely cut interest rates to suit Trump's desires, whereas Waller is a more suitable technocrat for the role.