{"id":626032,"date":"2025-12-11T09:57:14","date_gmt":"2025-12-11T09:57:14","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/626032\/"},"modified":"2025-12-11T09:57:14","modified_gmt":"2025-12-11T09:57:14","slug":"london-flat-and-europe-mixed-as-ai-fears-outweigh-federal-reserve-rate-cut","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/626032\/","title":{"rendered":"London flat and Europe mixed as AI fears outweigh Federal Reserve rate cut"},"content":{"rendered":"\n

The FTSE 100 (^FTSE<\/a>) and European stocks lacked direction on Thursday as traders assessed last night’s US Federal Reserve rate decision as well as Oracle\u2019s (ORCL<\/a>) mixed results. It comes as the software giant missed revenue and profit expectations and also reported a jump in spending on AI data centres, where it has already been spending and borrowing heavily.<\/p>\n

Capital expenditure for the 2026 fiscal year is now expected to be $15bn higher than the $35bn Oracle (ORCL<\/a>) estimated in September.<\/p>\n

Oracle (ORCL<\/a>) also booked a one-off $2.7bn pre-tax gain through the sale of its stake in chip designer Ampere Computing.<\/p>\n

For the last quarter, Oracle (ORCL<\/a>) reported total revenue of $16.06bn, below analysts\u2019 average estimate of $16.21bn. It added that adjusted profit for the current fiscal third quarter would be $1.64 to $1.68 per share, below analyst estimates of $1.72 per share, according to LSEG data.<\/p>\n

Ipek Ozkardeskaya, senior analyst at Swissquote, said: “The company continued to burn cash last quarter: its free cash flow reached a negative $10bn. To make matters worse, the company said that it expects capex to reach about $50bn in the fiscal year ending May 2026 \u2013 $15bn more than its September forecast \u2013 and investments at Oracle (ORCL<\/a>) are financed by debt: overall, the company has about $106bn in debt.”<\/p>\n

“Frankly, the report was not dramatically bad, but it came to confirm concerns around heavy AI spending, financed by debt, with an unknown timeline for revenue generation, sending Oracle (ORCL<\/a>) shares down by more than 11% in after-hours trading.”<\/p>\n

Meanwhile, the US central bank cut interest rates by a quarter percentage point as expected, to their lowest level in three years.<\/p>\n

While the Fed’s move had been priced in for several weeks, investors took some cheer from the fact that boss Jerome Powell was less hawkish in his post-meeting remarks.<\/p>\n