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Oracle shares down 11% after earnings miss; Nasdaq futures

-0.5%

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Euro breaks over $1.17 after Fed cut

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Short-dated Treasuries rally as Fed promises T-bill buying

By Tom Westbrook

HONG KONG, Dec 11 (Reuters) - Stocks wobbled around Asia

on Thursday after disappointing earnings at U.S. cloud computing

giant Oracle sounded a warning for AI profitability, while bonds

were firm and the dollar nursed losses after the Federal Reserve

cut U.S. interest rates.

Oracle shares tumbled more than 11% after hours,

dragging S&P 500 futures 0.3% lower and Nasdaq 100

futures down about 0.5% in Asia trade.

AI-related stocks were the biggest losers in Tokyo, as

Oracle's profit and revenue outlook missed forecasts and

executives flagged higher spending - a sign that infrastructure

outlays are not turning into profits as quickly as investors had

hoped.

Japan's Nikkei traded either side of flat in the

morning session with a 5% drop in the AI-exposed SoftBank Group

holding back the index.

Hong Kong's Hang Seng rose 0.8% in early trade to

put MSCI's broadest index of Asia-Pacific shares outside Japan

up 0.5%.

Overnight the Fed lowered its benchmark funds rate, as

expected, by 25 basis points to 3.5-3.75%.

But Fed Chair Jerome Powell sounded balanced on the outlook

at a news conference, easing market nerves about a hawkish

message. Wall Street indexes rallied after the rate cut and the

S&P 500 rose about 0.7%.

"I don't think a rate hike is anyone's base case," Powell

said.

That left interest rate futures with at least two rate cuts

priced in for next year and undercut the dollar, which helped to

send the euro through chart resistance and above $1.17.

Bonds caught a further boost as the Fed also announced it

would start buying short-term Treasuries as soon as Friday to

support liquidity.

Benchmark 10-year yields fell about two basis

points to 4.14% and two-year U.S. yields are down

around seven basis points at 3.54%.

Money markets had been volatile in recent weeks, leading to

a premium on short-term rates as liquidity was stretched.

"The Fed doesn't have a lot of appetite for that sort of

thing to continue because it inhibits the transmission of

monetary policy," said ANZ senior rates strategist Jack

Chambers.

DOLLAR SLIDES

Oil rose for a second straight session on Thursday after the

U.S. seized a sanctioned oil tanker off Venezuela's coast,

escalating tensions and raising concern over supply disruption.

Brent and U.S. crude futures were up more

than 30 cents to $62.53 and $58.85 a barrel, respectively.

In foreign exchange markets, the Fed decision and

policymakers' median projection for one cut in 2026 and 2027

opened the way for dollar selling.

The yen reversed a recent fall and rose to 155.66 per dollar

in Asia trade on Thursday. The euro struck a

two-month high of $1.1707, enjoying an extra boost from comments

by European Central Bank President Christine Lagarde that

another upgrade in European growth projections was possible.

Sterling, the Australian dollar and New

Zealand dollar all made gains before steadying in the

Asia session.

"The next big cue will be the November non-farm payrolls

release on 16 December and whether a soft number can keep market

pricing of two further rate cuts in 2026 intact," analysts at

ING said in a note.

"Seasonally, the dollar tends to weaken into year-end and

with Fed event risk now out of the way, EUR/USD could have that

run-up to 1.1800 after all."

(Editing by Shri Navaratnam)