Stocks closed mostly higher yesterday. The tech-heavy Nasdaq was off modestly, giving up -0.25%. But the Dow was the leader with 1.34%, followed by the small-cap Russell 2000 with 1.21%. And they both made new all-time highs in the process.

Follow through buying after Wednesday afternoon's expected 25 basis point rate cut continued to lift stocks. (More on that in a moment.)

What weighed on the Nasdaq yesterday was Oracle's 'disappointing' earnings on Wednesday after the close. Oracle has already been struggling since September, even while the indexes have all gone up. So context is important. And while they beat on earnings with a 38.65% EPS surprise, they posted a negative sales surprise of -0.55%. That translated into a quarterly EPS growth rate of 53.7% vs. this time last year, and a sales growth of 14.2%. But it was not the record revenue that companies like NVIDIA and Advanced Micro Devices, for example, have been able to put up. Oracle was down -10.83% yesterday.

Broadcom, however, after the close yesterday, posted a positive EPS surprise of 4.28%, and a positive sales surprise of 2.94%, for a quarterly EPS growth rate of 37.3%, and a sales growth of 28.3%. And they were able to post another record sales number. Moreover, they gave an upbeat outlook with CEO Hock Tan saying, "we see the momentum continuing in Q1 and expect AI semiconductor revenue to double year-over-year... driven by custom AI accelerators and Ethernet AI switches." They were off -1.60% in the regular session before earnings. But they were up by roughly 3.50% in after-hours trade following earnings.

Wednesday's FOMC Announcement was generally positive. They cut rates for the third time as they had forecast. They raised their outlook on GDP with 2026 expected to grow at 2.3% vs. the previous estimate of 'just' 1.8%. Their unemployment outlook remained steady and low, and their PCE inflation expectations reflected a gradual easing.

As for future rate cuts, they maintained their outlook for 1 rate cut next year, and 1 more in 2027. So no change from previous expectations. But some dissent on December's rate cut suggested a cut next year is not a foregone conclusion.

But with the Fed believing the employment report has been systematically overcounting jobs by roughly 60,000 per month ? since April, which would effectively result in negative job growth for some of those months, suggests a rate cut could indeed be forthcoming sooner rather than later, maybe even as early as January. And, maybe more than just one next year. Odds for a January '26 cut are only at 24.4%. But that rises to 49.3% for March.

The Fed has shifted their focus to the labor market vs. inflation as they see more risk there than the other. That being the case, easier monetary policy will help in shoring up job growth.

In other news, Weekly Jobless Claims rose 44K to 236,000, well above the consensus for 219K.

One more day left, and all of the major indexes are in the green for the week, so far. If they finish that way, that'll make it 3 up weeks in a row.

As you know, I'm still expecting the S&P to close up by 20% or more for the third year in a row. They only need another 2.7% more to do it.

And there's 12½ more trading days left. Remember, Q4 is the best quarter for stocks, and December has a 77.8% likelihood of being up. Those are good odds.

Best,