Never look a gift horse in the mouth, goes the old saying. The stock market was happy to welcome a cooler-than-expected inflation reading, while putting aside worries about the reliability of the data and whether the Federal Reserve is out of step with the rest of the world.
The anticipation of unwrapping a present heightens the excitement, which might account for enthusiasm about the delayed November consumer-price index reading on Thursday. Year-over-year price increases of 2.7% were down from 3% in September, which the market took as a green light for the Fed to keep cutting interest rates.
There are plenty of questions about the figures due to disruptions surrounding data collection amid the government shutdown. Housing costs were a particular issue, with missing data pushing down estimated rent levels. But investors weren't in the mood to be doubters, especially with the artificial-intelligence trade gaining momentum on the back of Micron earnings and reports OpenAI is in talks to raise as much as $100 billion.
Optimism about Fed cuts is justified, considering the elevated unemployment rate from earlier this week. But it's worth noting a couple of risks. First, data gaps leave the risk of a higher inflation reading in January. Second, while the Fed is cutting, other global central banks are pausing or even raising rates. Most importantly, the Bank of Japan lifted its policy rate target to 0.75% on Friday, the highest level in 30 years. The end of ultralow interest rates in the Asian country could raise costs for some U.S. investors who borrow cheap yen to fund trades, while incentivizing Japanese savers to sell overseas assets and bring their cash back home.
Neither of those risks is going to ruin Christmas or the awaited Santa Claus rally. A more accurate inflation reading will come in the new year, while the effects of Japanese interest rates rising could take months or years to feed into the market. Still, it's worth putting them down on the list for things to watch out for in 2026.
-- Adam Clark
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TikTok and Oracle Sign Agreement for U.S. Venture
The multiyear saga about TikTok's ownership may be drawing to a close, finally. On Thursday, the short-form video app and its Chinese owner ByteDance signed agreements with software giant Oracle and two other investors to form a new U.S. joint venture.
-- CEO Shou Zi Chew told employees in a memo viewed by Barron's that the
venture will be 50% held by a consortium of new investors, including
Oracle, private-equity firm Silver Lake, and Emirati state-owned investor
MGX. Each will hold 15% in the new entity, named TikTok USDS Joint
Venture LLC. The remaining 5% is held by several others.
-- ByteDance will retain a 19.9% stake, and affiliates of certain existing
investors of ByteDance will hold 30.1% of the venture, the memo reads.
-- Lawmakers from both U.S. political parties have labeled TikTok a national
security threat due to its Chinese ownership, and in April 2024 President
Joe Biden signed a law that would ban the app unless it was sold. TikTok
Was unavailable to users in the U.S. for a brief period in January for a
brief period in January.
-- President Donald Trump wanted TikTok banned in his first term in the
White House but on his second Inauguration Day he signed an executive
order to keep it running. In September, Trump signed another executive
order that extended the deadline to enforce a ban.
What's Next: The memo stated that the joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance. The deal will close on Jan. 22, according to the memo.
-- Angela Palumbo and George Glover
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Nike Beats Forecasts, But China Sales, Profit Disappoint
Nike's new CEO Elliott Hill said the athletic apparel maker is in the middle innings of a comeback. The company topped fiscal second-quarter earnings and revenue expectations, but investors were disappointed about declining profit and lackluster sales in the key China market.
-- Revenue rose 0.6%, to $12.4 billion for the quarter ended Nov. 30. North
America and the region including Europe, Middle East, and Africa were up
9% and 3%, respectively, from a year ago. Greater China sales, however,
dropped 17%, accelerating from the first quarter's 9% decline.
-- Adjusted earnings of 53 cents a share were down 32% from a year ago.
Nike's gross margin slid three percentage points, primarily because of
higher U.S. tariffs on imports. Direct-to-consumer sales slid 8%, while
demand-creation and marketing costs rose 13%.
-- Hill said Nike is making progress in areas it prioritized and is
confident in its actions to drive long-term growth and profitability.
Executives have warned that Nike's recovery wouldn't be linear, meaning
some quarters would be stronger than others as the new initiatives take
hold.
-- Nike is facing more competition from brands like Hoka, which is owned by
Deckers Outdoor, and On Running. It also has challenges clearing out old
inventory, including casual sneakers, and is facing more budget-conscious
consumers, MarketWatch reported.
What's Next: Nike has refrained for several quarters from providing full-year guidance, but it expects third-quarter revenue to be down by a low single-digit percentage. Analysts had projected a 1.3% increase. North America will see modest growth in the quarter, while the trends in China should track the second quarter.
-- Sabrina Escobar and Janet H. Cho
***
FedEx's Earnings Beat Expectations as Shipping Volumes Rise
FedEx beat expectations for second quarter revenue and profit, getting a boost from cost reductions and higher U.S. shipment volumes that allowed it to raise the low end of its full-year outlook. CEO Raj Subramaniam said it was able to execute on its growth strategy despite the challenging environment.
-- The shipping giant reported adjusted earnings of $4.82 a share and sales
of $23.5 billion. Higher U.S. and international priority package yields
boosted results for its Federal Express segment, as did higher domestic
package volume. The gains were only partially offset by trade policy
shifts, it said.
-- FedEx is spinning off its freight business to a separate company, and
said that process is on track and expected to be finished June 1. The new
company is having an investor day on April 8 ahead of the separation.
One-time spinoff costs in the quarter were $152 million.
-- CFO John Dietrich said the second quarter results and updated guidance
reflect that momentum is building and that the progress it has made on
strategic initiatives is tangible. Second quarter revenue was 7% higher
than a year ago.
-- FedEx is still some way off its recent peak in quarterly sales, at $24.4
billion in the fourth quarter 2022. More recently, inflation and lower
domestic shipment volumes weighed on results. But it got new business
from Amazon.com after United Parcel Service walked away, citing
insufficient profitability.
What's Next: Now FedEx expects sales of 5% to 6% and adjusted earnings of $17.80 to $19 for the full fiscal 2026 year. That's marginally better than September, when its forecast was for 2026 sales growth of 4% to 6% and adjusted earnings of $17.20 to $19 a share.
-- Al Root and Liz Moyer
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Trump's Media Company Going Nuclear in $6 Billion Deal
Trump Media & Technology Group, the company that owns President Donald Trump's social-media platform, struck an odd deal to expand into nuclear fusion by buying TAE Technologies for $6 billion in stock. They framed it as boosting America's chances to win the AI revolution.
-- If approved, the combined company would start building a 50-megawatt
utility-scale fusion power plant next year. They are looking for a site
and planning additional fusion power plants supplying 350 to 500
megawatts. Fusion is a futuristic technology that's not considered
commercially viable yet.
-- But nuclear energy is a battleground unfolding between the U.S. and China
to dominate AI. Modular reactor maker Oklo is one of the few publicly
listed American nuclear companies. Privately held TAE is backed by
Alphabet-owned Google, Chevron, and Goldman Sachs.
-- TAE gives Trump Media, which reported $716 million in cash and
equivalents and other investments as of Sept. 30, a new business line
that could eventually produce substantial revenue. Trump Media gives TAE
access to capital it desperately needs to build its first commercial
reactor.
-- China investing in fusion and scaling its nuclear grid into 2030 puts
more pressure on the U.S. to respond, Wedbush analyst Dan Ives wrote. TAE,
now with significant capital, will be at the forefront of U.S. nuclear
fusion ambitions, he added.
What's Next: TAE CEO Michl Binderbauer, who will head the combined company with Trump Media CEO Devin Nunes, projects that its first reactor could be online in 2031. The reactor is expected to have the capacity for 50 megawatts of electricity, or enough to power tens of thousands of homes.
-- George Glover, Avi Salzman, and Janet H. Cho
***
President Floats Housing Affordability as Lawmakers Question Deal
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December 19, 2025 06:37 ET (11:37 GMT)
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