MPC Morning Call 12th December 2025 – S&P500 sets fresh record despite Oracle raising AI concerns
The S&P500 edged out a record close overnight, though gains were kept in check by an Oracle-fuelled drag on AI-related stocks at a time when valuation concerns persist.
WATCH ON YOUTUBE Overnight – S&P500 sets fresh record despite Oracle raising AI concerns The S&P500 edged out a record close overnight, though gains were kept in check by an Oracle-fuelled drag on AI-related stocks at a time when valuation concerns persist. Oracle’s stock slumped after the cloud computing giant announced a significant increase in capital expenditure for fiscal 2026, raising concerns about how effectively it can turn heavy AI investments into revenue. The company’s growing debt levels, fueled by bond and note issuances to fund its AI buildout, further worried investors. This slide weighed on broader AI market sentiment, pulling down leading stocks like NVIDIA and Alphabet. However, Adobe bucked the trend with strong earnings guidance, suggesting success in monetizing its AI-enhanced creative tools, while Disney gained after revealing a $1 billion AI partnership with OpenAI that will feature Disney characters on the Sora video platform. Eli Lilly’s shares climbed following promising late-stage trial results for its next-generation obesity drug, which helped patients lose an average of 28.7% of their weight—outperforming its existing blockbuster, Zepbound. The upbeat health sector news contrasted with the more cautious tone in the technology and AI segments, suggesting investors were being selective amid shifting expectations for growth industries. Meanwhile, the U.S. Federal Reserve cut interest rates by 25 basis points, marking its third rate reduction in the current cycle. Though the move was expected, Fed Chair Jerome Powell’s balanced comments tempered hopes for further aggressive easing, emphasizing data dependence. The Fed also announced a new liquidity-support program involving $40 billion in monthly Treasury bill purchases. Jobless claims rose to 236,000, indicating some softening in the labor market, while a narrowing trade deficit to $52.8 billion hinted at stronger export activity that could support third-quarter U.S. growth. Corporate News Broadcom (AVGO) rose 3% after it published strong quarterly results and guidance. Revenue was $18,015 million for the fourth quarter, up 28% from the prior year period. Costco (COST) fell 0.8% after it reported quarterly revenue that was in-line with consensus. Net sales for the first quarter increased 8.2 %, to $65.98 billion from $60.99 billion last year. lululemon athletica (LULU) rose 10% after results topped estimates, despite lackluster guidance and news that its CEO will step down. Government Bond Yields Commodities, Energy & FX ASX Overnight: SPI 8679 (+1.02%) The Day Ahead: The ASX200 is undervalued, expect to see a higher open and grind higher over the day
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