Fed cut on deck, Oracle and Broadcom test AI trade, Buffett era winds down

Dec 8, 2025

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US stocks are little changed to start the week as investors wait on the Federal Reserve’s rate decision and a fresh read on the AI boom from Oracle and Broadcom. Futures point to a modestly higher open, with the Russell 2000 attempting to break out, while bond volatility and the VIX remain near year lows. Markets are pricing a roughly 90% chance that the Fed will cut rates by 25 basis points this week, even as inflation remains roughly a whole point above target and officials remain sharply divided on how quickly to ease. Several regional presidents may dissent over sticky prices, while Governor Steven Myron is likely to push again for a deeper 50 bp move.

The AI trade undergoes a key report from ORCL and Broadcom (AVGO). Stress test when Oracle (ORCL) and Broadcom (AVGO Oracle has slumped about 24% in two months as Wall Street worries about massive AI capital expenditures needs for a company without the cash machine of hyperscalers like Alphabet (GOOG) and Microsoft (MSFT), making it a “canary in the coal mine” for AI valuations. Broadcom, up nearly 70% year to date, continues to outpace the broader chip sector and is now being discussed as parNVDA).t of a “Mag 8” alongside Nvidia (NVDA Netflix’s (NFLX) $72 billion bid for Warner Bros. Discovery (WBD) faces new regulatory and political scrutiny after President Trump said the deal could be a problem, just as Paramount Global (PARA) raised its competing all-cash offer to $30 per share.

Berkshire Hathaway (BRK-B) is also in transition as longtime investment chief and GEICO CEO Todd Combs departs for JPMorgan (JPM), underscoring how incoming CEO Greg Abel is already reshaping the conglomerate’s leadership and structure ahead of Warren Buffett’s year-end exit. IBM (IBM) is acquiring Confluent (⁠CFLT⁠) for $9.3 billion to enhance its data-streaming and AI capabilities, while Tesla (⁠TSLA⁠) slides after a Morgan Stanley downgrade highlights growing dispersion within the once-unified "Magnificent Seven" trade.

Takeaways:

Fed expected to deliver a third 25 bp cut of the year amid unusually public division over inflation and growth
Oracle and Broadcom earnings seen as key tests of whether AI spending still justifies premium valuations
Netflix’s $72B Warner Bros. deal faces political pushback as Paramount lifts its rival's all-cash bid
Berkshire Hathaway loses top stock picker Todd Combs to JPMorgan as Greg Abel starts to put his stamp on the firm
IBM buys Confluent for $9.3B to bolster AI data streaming; Tesla downgraded as Mag 7 leadership begins to fragment

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