When faced with a particularly puzzling case and not much evidence to go on, Sherlock Holmes once said, “It is a capital mistake to theorize before one has data.” Investors should heed that advice when deciding whether to pursue a market rotation.
Amid celebrations over the end of the U.S. government shutdown on Wednesday, the White House said October’s inflation and jobs reports will “likely never” be released. Although that’s yet to be confirmed by the
agencies responsible, it would leave a significant gap in the data available to the Federal Reserve ahead of its December meeting and allow doubt to creep in about the central bank’s rate-cutting path.
Nervousness is already evident. Boston Fed President Susan Collins—a voting member of the Fed’s rate-setting committee this year—said there should be a “high bar” for further easing. That contributed to market pricing of a December reduction falling to 58% according to the CME FedWatch tool, down from more than 95% a month ago.
The shift in rate expectations could be contributing to a mini rotation in markets. The Dow Jones Industrial Average is hitting new highs and has beaten the tech-heavy Nasdaq Composite by 2.38 percentage points over the past two trading days, its largest such outperformance since February, as all of the Magnificent Seven stocks
dropped Wednesday.
Still, it seems premature to suggest tech’s leadership is over. We’re less than a week away from earnings from chip maker Nvidia, whose rival AMD just said its own data-center AI revenue should grow by more than 80% a year for up to five years.
As investors hunt for leads on where stocks go from here, that data point could be the biggest clue.
—Adam Clark
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The Shutdown Ends. Now Everyone Deals With the Fallout.
President Donald Trump signed a bill to end the longest government shutdown
in history after the House approved the spending package. The deal funds the government through Jan. 30 and includes full-year funding for military construction, the legislative branch, and the Department of Agriculture.
- The funding deal should end several crises that bubbled up during the shutdown, including a shortage of air-traffic controllers that disrupted air travel across the country and a battle in the courts over the partial or full payment of food assistance. It also reverses cuts to the federal workforce.
- Subsidies to lower premiums for Affordable Care Act health plans were a main sticking point in the shutdown. Republicans don’t want to extend them when they expire this year, while Democrats want to extend them three years and are trying to force a vote on it with a discharge petition.
- The discharge petition requires Democrats to get 218 signatures, which will mean they need four Republicans to sign on with 214 from their own caucus, including newly sworn in Arizona Rep. Adelita Grijalva. If successful, the bill would bypass any efforts by Speaker Mike Johnson to block a vote on the subsidies.
- October data on labor and inflation might never be produced, according to White House press secretary Karoline Leavitt, who blamed Democrats and said the shutdown may have permanently damaged the federal statistical system. The Bureau of Labor Statistics will announce what data it will release when reopened.
What’s Next: The administration is responding to consumer complaints about the high costs of staple items such as coffee and voter dissatisfaction with the economy. Treasury Secretary Scott Bessent says the administration would be announcing changes to tariffs on coffee, bananas, and other items in the next couple of days.
—Joe Light, Matt Peterson, and Anita Hamilton
Chevron Expanding Electricity Business to Power AI Data Centers
Chevron is ready to build its power generation business, aiming to bring a plant online by 2027 to feed an artificial intelligence data center in West Texas. The expansion of the oil producer’s
electricity operations comes amid heightened interest in meeting the energy demands of AI hyperscalers.
- Chevron, the second-largest U.S. oil producer, is working with GE Vernova, which builds natural-gas turbines, and investment firm Engine No. 1 on the operation. They are in exclusive talks with a premier customer, and plan to make a final investment decision in early 2026.
- The project is expected to provide 2.5 gigawatts of off-grid power—enough to power almost two million homes—and can expand to five gigawatts if demand necessitates it. Chevron operates about five gigawatts of off-grid power at its remote facilities in areas of Kazakhstan and Australia.
- Jeff Gustavson, who heads Chevron’s carbon-cutting unit, said the company is hearing interest from very large-scale customers whose desire for this power in a short time frame seems “to grow and grow and grow.”
- Chevron trimmed its capital spending guidance to $18 billion to $21 billion a year through 2030. The midpoint of that range represents a slight decline from its current projection, after taking into account its Hess acquisition. Exxon Mobil, meanwhile, is spending more heavily on expansion.
What’s Next: Chevron aims to boost oil and gas production by up to 3% annually through 2030 and says it can pay dividends and capital expenses even if Brent crude falls below $50 a barrel. It plans to buy back up to $20 billion in stock a year assuming oil is $60 to $80 a barrel.
—Avi Salzman and Janet H. Cho
Cisco Beats Expectations on Booming Demand for AI
