The Federal Reserve announced a quarter-point rate cut this week, now at 3.5% to 3.75%. Borrowers hope to find respite in future lending rates. However, no significant change should be expected in long-term payments, as the Fed’s benchmark rates do not directly impact them; instead, they rely more on Treasury yields and economic growth.
Credit card interest rates could become slightly lower in the near term, but so will savings, as the Fed’s rate influences the interest rates offered on savings accounts or certificates of deposits.
This week, indices performed better on some days, with some even recording fresh highs, before the S&P 500, Nasdaq, and Russell 2000 ended up more than 1% lower on Dec. 12, while the Dow was down 0.5% and impacted their overall weekly performance.
- The S&P 500 was down 0.6% this week, with some notable misses from Broadcom and Sandisk.
- The tech-heavy Nasdaq Composite was down 1.6% this week, marking an overall week of misses in tech stocks, particularly from Oracle following its earnings report.
- The Dow Jones and Russell 2000 both recorded fresh highs this week and closed 1% and 1.2% higher, respectively.
Gold continues its rally, up 2% this week, and Silver, the precious metal making headlines this month after the Gold craze, was up 5% this week, despite a 3% drop on Dec. 12 around the closing bell. Silver has recorded a 112% year-to-date stock gain.
Natural Gas was down 22% this week, and the warmer weather forecast is to be credited. If this trend continues, expect your energy bills to decrease, albeit slightly, provided you use natural gas for heating and cooking purposes. However, it is still up 12.9% year-to-date.
Geopolitical tensions and concern over oil supply are causing oil prices to continue their downward trend, as they recorded a 4% decline this week and are down 19.8% year-to-date.
In the coming week, we look forward to the November nonfarm payrolls or jobs report and the CPI report. Additionally, companies such as Micron, Nike, and Accenture report earnings.
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Cannabis reclassification may be coming
In terms of government actions impacting stocks, CNBC reported that on Monday, Dec. 15, President Donald Trump might issue an order allowing for the reclassification of cannabis, which would change its existing classification from a Schedule I to a less regulated Schedule III drug.
Following the news, several cannabis stocks shot up, creating a bullish frenzy among investors. On Friday, Dec. 12:
- Curaleaf Holdings was up 37.9%.
- Tilray was up 44%.
- Canopy Growth was up 53.9%.
- Trulieve Cannabis was up 66.6%.
- Green Thumb Industries was up 51%.
Except for Tilray at $12.15, all others are priced under $10.
GE Aerospace powers through
As Citi initiated coverage of GE Aerospace with a buy rating and a price target of $386, the company’s stock increased by 3.9% on Friday, Dec. 12, representing a 5% gain for the week and a 79% year-to-date gain.
Citi analysts are bullish on aerospace and defense, initiating coverage of about 24 stocks in this industry, and believe that they face a “number of megatrends” in the defense, shipbuilding, space, and commercial aerospace sectors.
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Citi also believes that at least one company from the sector could reach a $1 trillion market capitalization, with GE Vernova being the most likely candidate to achieve this in the next five years.
Citi sees Boeing as an “unusually attractive mega-cap turnaround story” for the “Marquee Megatrends stock” GE Vernova, as noted at TheFly.
The AI race: Broadcom and Oracle in the mix
Broadcom and Oracle, two tech stocks with significant investments in AI, reported their earnings this week, and investors anticipated favorable revenue growth from their AI sectors.
However, as they failed to meet expectations, the company’s stocks suffered. Still, at least for one of the two, analysts remain bullish.
Related: Analyst makes major change to Micron stock price target
Oracle announced its F2 2026 earnings report on Wednesday, Dec. 10, and despite mostly optimistic results, its stock fell as much as 12% this week, missing Wall Street expectations slightly. The company announced $16.1 billion in revenue, a 14% year-over-year increase, with cloud revenues rising 34% to $8 billion.
Remaining performance obligations, or revenue that has not been entirely accounted for, given that the services in the contract still need to be fulfilled, were up 15% from Q1 at $523 billion, buoyed by commitments from Nvidia and Meta.
Oracle anticipates changes in AI technology over the years and has announced the sale of its chipmaking division, Ampere.
Amid the decline in stock prices, Bloomberg reported that Oracle has delayed the completion of some OpenAI data centers from 2027 to 2028 due to material and labor shortages. However, soon after, Oracle told Reuters that there are no such delays and that all milestones remain on track, as noted by TheFly.
Goldman Sachs analyst Kash Rangan lowered its price target to $220 from $320, while maintaining a neutral rating. Rangan cited modest reported revenue growth and noted that higher capital expenditures and free cash flow burn increased concerns over Oracle’s growing financial needs.
Sachs also sees the bring-your-own-chips policy as concerning, signaling uncertainty and an unsustainable approach. It acknowledges that Oracle has addressed balance-sheet concerns, but that the significant capital expenditure increase without any revenue uplift in the near term is concerning.
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On the other hand, Broadcom, a leading semiconductor manufacturer, announced its Q4 2025 earnings on Thursday, December 11. It reported a revenue of $18 billion, up 28% year-over-year, driven by continued momentum across its infrastructure software and semiconductor businesses.
The company generated $7.5 billion in free cash flow, with a GAAP net income of $8.5 billion. Broadcom also raised its fiscal Q1 2026 revenue forecast to $19.1 billion, underlining a 28% year-over-year increase.
Despite the strong results, it experienced an 11% stock decline on Friday, Dec. 12; however, its year-to-date stock gain remains strong at 55%.
Analysts, however, are bullish over its consistent performance.
- Truist raised its price target to $500 from $365, maintaining a buy rating, citing that it views Broadcom’s EPS (GAAP diluted at $1.74 for Q4) as more important than its “pretty low drama” earnings beat and guidance raise. As reported by TheFly, it recommends buyingBroadcom for its “AI growth with duration.”
- Deutsche Bank raised its price target to $430 from $400, keeping a buy rating, and sees Broadcom’s earnings for its “impressive” growth in Q4, TheFly reported.
- Benchmark analyst Coy Acree raised the price target from $385 to $485, keeping a buy rating, saying that given the 120% stock gain over the year, investors were “prepped for profit taking almost regardless of the strength of last night’s earnings release.” Broadcom also sees strength across its networking, DSP, optical components, and switching portfolio, according to TheFly.
Lululemon relies on international gain
In a twist from low-performing tech stocks, this week, some retail stocks became the top performers, such as Lululemon. As Jefferies upgraded Lululemon to hold from underperform, increasing its price target from $120 to $170, the company’s stock soared 9.6% on Friday, Dec. 12.
This also followed an announcement from the athleisure brand’s CEO Calvin McDonald, who plans to step down effective January 31, 2026. The news was shared alongside Lululemon’s Q3 2025 earnings report, which reported a noticeable increase in international revenue.
While its net revenue rose 7% to $2.6 billion, Lululemon was supported by strong international growth that offset the softness in the Americas. International revenue increased by 33%, while revenue in the Americas declined by 2%.
Overall, comparable sales increased by 1%, but gross margin remained under pressure, down 55.6%, and operating income fell by 11%.
Lululemon’s diluted EPS declined to $2.59 from $2.87 last year as the company invests in a turnaround.
Related: Mortgage rates tick lower as the Fed trims key rate
