Mornings like this remind me why I still get a rush from markets after all these years. You wake up, grab your coffee, and suddenly Disney is handing OpenAI a billion dollars while Oracle is getting absolutely crushed before the bell. The Fed just cut rates again but basically said “don’t get used to it,” and we’ve got two heavyweight earnings after the close. Just another Thursday, right?
Let’s dive in, because there’s a lot moving today and some of these stories are going to matter for months.
What Caught My Eye Before the Opening Bell
Disney Makes the Boldest AI Move Yet
Let’s start with the headline that actually made me spit out my coffee.
Disney is investing $1 billion in equity into OpenAI and, more importantly, they’re opening up their entire vault of characters for Sora, OpenAI’s video generator. We’re talking Mickey Mouse, Marvel heroes, Pixar characters, Star Wars everything. Over 200 iconic characters will be available for users to create short videos with.
I’ve been saying for years that the entertainment giants would eventually have to pick a lane with generative AI: fight it in court forever or figure out how to make money from it. Disney just chose the second option in the most aggressive way possible. This isn’t some timid licensing deal; this is Disney saying “we’re going to own part of the future of content creation.”
From a business perspective, it’s actually brilliant. They get equity upside in OpenAI, they get royalties every time someone uses their characters, and they stay culturally relevant with Gen Z and Gen Alpha who are growing up making AI videos instead of just watching TV. The stock was up modestly pre-market, but I think this move gets dramatically under-appreciated today and dramatically appreciated six months from now.
Oracle’s Rough Night
On the complete opposite end of the spectrum, we have Oracle.
The company reported earnings after the close yesterday and… well, it wasn’t pretty. Revenue missed estimates, guidance was light, and the stock is down more than 13% as I write this. That’s a $40+ billion market cap wipeout before breakfast.
The real question everyone is asking: can their biggest cloud customer (who we all know is a very large tech company that rhymes with “Schmamazon”) actually pay the massive bills they’re racking up? Analysts are starting to whisper that maybe those huge AI training deals Oracle bragged about might have payment terms that are… flexible.
When your biggest growth driver might be built on IOUs from one customer, that’s not exactly the foundation dreams are made of.
I’ve owned Oracle in various portfolios over the years, and this feels like one of those moments where the growth story hits a speed bump that might last longer than people expect. The cloud acceleration story was supposed to be Oracle’s redemption arc. Right now, that arc looks more like a detour.
The Fed Speaks – And Markets Listen (Sort Of)
The Federal Reserve delivered their third rate cut of 2025 yesterday – 25 basis points, right on schedule. But the real news was in the dot plot and Powell’s press conference.
They’re now signaling a much slower pace of cuts ahead, basically saying “we’ve done a lot, let’s see how this plays out.” Powell specifically mentioned they’re making good progress on inflation but want to see how potential tariffs might affect prices next year.
- Labor market cooling faster than expected
- Weekly jobless claims jumped more than forecast this morning
- Tariff uncertainty is real
- No rush to cut further
This morning’s S&P 500 futures are pointing to a lower open after we nearly hit new records yesterday. Classic “sell the news” reaction, even though the news was largely expected. The bond market is taking it in stride, with the 10-year yield actually dipping a bit.
In my experience, when the Fed shifts to “we can wait” mode, it usually means volatility stays elevated but trending markets can continue. The path of least resistance for stocks has been higher all year. I’m not sure today changes that.
Two Earnings I’m Watching After the Close
Tonight we get reports from two very different but very important companies: Broadcom and Costco.
Broadcom has been one of the best-performing large-cap stocks of 2025, largely on the strength of their AI networking chips. The question is whether they can keep delivering the kind of growth that justifies their premium valuation. They’ve been beating and raising all year. If they do it again tonight, especially with strong AI commentary, this stock could have another leg higher.
Costco, meanwhile, is the ultimate “tell us about the consumer” stock. Are people still willing to pay for that membership and buy in bulk? Are they trading down to Kirkland brands? The September quarter was solid, but with holiday spending questions swirling, this report could move retail stocks broadly.
The Quiet Winners Keep Winning
Sometimes the best stocks are the ones nobody is talking about constantly.
Cisco Systems closed at a record high yesterday, finally surpassing its dot-com bubble peak from March 2000. Think about that – 25 years later, this “old tech” company is making new all-time highs because they’re quietly becoming an essential AI infrastructure play.
Synopsys got upgraded this morning after their quarter, with analysts pointing to reduced China risk and that massive Nvidia investment as derisking factors. When Jensen Huang is writing you $2 billion checks, people tend to pay attention.
Adobe beat expectations and guided higher for 2026, showing that their AI monetization strategy is actually working. Maybe not as fast as some hoped, but working nonetheless.
Healthcare Keeping Pace
Eli Lilly’s experimental obesity drug retatrutide delivered impressive results in trials, showing not just massive weight loss but also significant reduction in knee pain. This could be a game-changer for joint replacement demand down the road.
The stock has pulled back from its brief flirtation with a $1 trillion market cap, but results like this remind you why it got there in the first place. The obesity drug market is going to be measured in hundreds of billions eventually.
The Oil Trade Might Be Rolling Over
Bank of America came out this morning cutting price targets across the oil complex, warning that many of the temporary supports for crude prices could fade. They’re particularly cautious on refiners like Valero.
Oil has been weak since June, and with global growth questions and potential supply increases, this feels like a sector to be very selective in right now.
Final Thoughts
Days like today are why I love this business. You have massive strategic moves like Disney embracing AI, brutal earnings misses like Oracle, central bank pivot points, and major companies reporting after the bell.
The market is trying to figure out whether the AI buildout justifies current valuations while simultaneously worrying about slower rate cuts and potential tariffs. That’s a lot to process before 9:30 AM.
My base case remains that the path of least resistance is higher for quality stocks, especially those with real AI exposure or strong pricing power. But volatility is clearly here to stay.
Stay nimble out there.
