5 Things to Know Before Wednesday’s Stock Market Opens

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Here are five key things investors need to know to start the trading day:

We are counting down to the Federal Reserve’s interest‑rate decision this afternoon and Chair Jerome Powell’s subsequent press conference. While most market participants anticipate a rate cut, equity markets have remained cautious ahead of the announcement.

Key points:

• Fed funds futures imply a roughly 90 % probability of a 25‑basis‑point reduction, according to CME’s FedWatch tool.
• Many analysts describe the expected move as a “hawkish cut,” signaling that this could be the last reduction for an extended period.
• A recent Fed survey shows 87 % of respondents expect a cut today, but only 45 % think a cut is warranted. Just 35 % forecast another cut in January.
• The Russell 2000 rallied to new all‑time highs yesterday as investors priced in a loosening monetary stance, which traditionally benefits smaller‑cap companies.
• Conversely, the S&P 500 and Dow Jones Industrial Average slipped, dragged lower by JPMorgan Chase after the bank disclosed higher‑than‑expected expense forecasts for next year. Both indices are in the red for the week.
• President Donald Trump is slated to begin final interviews for the next Fed chair this week, starting with former Fed Governor Kevin Warsh.

After Powell’s press conference, investors will turn their attention to Oracle’s second‑quarter earnings, which are scheduled for after the bell. The software giant faces a two‑fold test: proving that its aggressive infrastructure‑investment plan remains financially sustainable, and demonstrating that its AI‑driven growth narrative can translate into earnings.

Oracle has been expanding its cloud‑AI portfolio, investing heavily in custom silicon and high‑performance compute clusters. These capital commitments have inflated its balance sheet, raising questions about free‑cash‑flow coverage. Analysts will be watching operating margin trends and the trajectory of AI‑related subscription revenue.

In pre‑market trading, Oracle shares are relatively flat. The stock is up more than 30 % year‑to‑date, despite experiencing its steepest one‑month decline in over two decades in November. The market will be keen to see whether the earnings beat can reinforce the rally and validate the “AI premium” investors have priced in.

Big‑pharma companies are committing substantial capital to domestic manufacturing as they chase the burgeoning obesity‑treatment market.

Eli Lilly announced a $6 billion investment to build a new plant in Huntsville, Alabama, designed to produce its experimental obesity drug and additional pipeline candidates. The project is the third U.S. facility the company has unveiled this year, underscoring a strategic shift toward on‑shore production to mitigate supply‑chain risks and meet anticipated demand.

Pfizer, meanwhile, signed a $2.1 billion licensing agreement with YaoPharma to co‑develop and commercialize its own obesity candidate. The deal follows Pfizer’s recent acquisition of Metsera, further cementing its commitment to the weight‑loss segment, which analysts estimate could become a $100 billion market by 2030.

These moves reflect a broader industry trend: pharmaceutical firms are leveraging higher domestic manufacturing capacity to secure regulatory approvals, reduce reliance on overseas contract manufacturers, and capture premium pricing for high‑value therapeutics.

The Department of Education disclosed a proposed settlement that would require borrowers enrolled in the SAVE (Saving on a Valuable Education) repayment plan to choose a new repayment method, effectively ending the current payment pause for millions of borrowers.

New data show 42 % of borrowers say the restart of payments will make it harder to cover basic necessities such as food and housing, while more than half report that debt hampers their ability to save for retirement. The policy shift could have ripple effects on consumer spending and, by extension, the earnings outlook for retail and discretionary sectors.

Target is positioning itself as a trend and style leader by revamping its flagship SoHo location. The redesign includes rotating merchandise, a dedicated beauty bar, and curated displays featuring celebrity and influencer partnerships.

The store’s new format is intended to attract discretionary‑spending shoppers in one of the nation’s most fashion‑forward districts. Incoming CEO Michael Fiddelke described the space as a “punctuation point” for Target’s evolving style sensibility and a testbed for concepts that may roll out to other high‑traffic locations.

Renovation work spanned four months, with Target accelerating the reopening to capture holiday‑season traffic. Early foot‑traffic metrics suggest the experiential format is resonating with shoppers seeking a blend of affordability and curated fashion.

—Contributors: Jeff Cox, Sean Conlon, Hugh Son, Steve Liesman, John Melloy, Seema Mody, Annika Kim Constantino, Annie Nova, Melissa Repko. Edited by Josephine Rozzelle.

Correction: An earlier version of this newsletter incorrectly identified the worst month for Oracle’s stock since 2001. It was November.