\n The Fed\u2019s three consecutive cuts in September<\/a>, October<\/a> and December<\/a> helped markets climb higher and look past nerves about artificial intelligence and uncertainty about tariffs<\/a>.\n <\/p>\n \n With Fed Chair Jerome Powell telegraphing that rate cuts might be on pause for a while, Wall Street\u2019s focus is turning elsewhere. And uncertainty that had been bubbling under the surface becomes harder to ignore when there isn\u2019t Fed rate-cut optimism to help boost stocks<\/a>.\n <\/p>\n \n Lingering concerns about AI are resurfacing, while recent moves in the bond market are giving some investors pause.\n <\/p>\n \n One concern: While AI might not be in a bubble<\/a> that\u2019s about to burst, there is genuine uncertainty about just how profitable every company with enormous aspirations is going to be \u2014 and whether the spending taking place will be justified.\n <\/p>\n \n Wall Street is taking a more scrupulous look at AI companies\u2019 earnings results. Oracle shares (ORCL<\/a>) slumped 13% on Thursday \u2014 wiping out more than $100 billion in market value \u2014 after the company reported third-quarter results that just missed Wall Street\u2019s expectations.\n <\/p>\n \n Oracle shares are down 41% since hitting a record high in September.\n <\/p>\n \n \u201cOracle is entering into the heaviest phase of its AI infrastructure buildout, and [the third quarter] highlighted the timing mismatch of buildout spend to revenue conversion,\u201d analysts at Bank of America said in a note.\n <\/p>\n \n AI and tech stocks have helped carry the market higher in recent years. So when investors sell shares, it can weigh on the broader market.\n <\/p>\n \n Tech shares came under pressure on Thursday. Nvidia (NVDA<\/a>) fell 2.1%, while Alphabet (GOOG<\/a>) fell 2.3%, weighing on the Nasdaq.\n <\/p>\n \n Investors rotated into other sectors, pushing the Dow higher by 620 points, or 1.29%, and putting it on track for a record high close. The S&P 500 inched higher and was also set for a record high.\n <\/p>\n \n \u201cWe\u2019re not surprised to see near-term optimism in the markets, given that the Fed continues to cut rates even though the economy is growing,\u201d Chris Zaccarelli, CIO at Northlight Asset Management, said in an email.\n <\/p>\n \n \u201cHowever, we think the rose colored glasses may come off once investors realize that the path to lower interest rates may take longer \u2014 or may not materialize at all \u2014 to the extent that they believe it will,\u201d Zaccarelli said.\n <\/p>\n \n Affordability<\/a> \u2014 and the cost of living \u2014 are front and center in discussions about the economy. President Donald Trump continues to lambast the Fed for not lowering rates as fast as he\u2019d like.\n <\/p>\n \n The Fed\u2019s benchmark interest rate influences borrowing costs<\/a> like credit card rates. But it\u2019s long-term bond yields \u2014 like the 10-year Treasury \u2014 that influence borrowing costs like mortgage rates.\n <\/p>\n \n When the Fed cuts rates, bonds tend to rally, pushing down yields \u2014 and resulting in lower borrowing costs.\n <\/p>\n \n But the opposite recently happened: The 10-year yield just hit its highest level in three months before falling on Wednesday and Thursday.\n <\/p>\n \n It\u2019s a sign that investors could be nervous that inflation might be a more persistent issue. (So they demand a higher yield to compensate for that potential inflation eating into their return).\n <\/p>\n \n And it\u2019s also a stark reminder that while Trump wants lower rates, the bond market will have the final say in determining key borrowing costs.\n <\/p>\n \n Other items on bond investors\u2019 minds:\n <\/p>\n![\"When](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/12\/ap25344569337501.jpg\")
<\/p>\n
![\"The](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/12\/ap25338621470597.jpg\")
<\/p>\n