So, where are the promised benefits of rate cuts? When the market opened, it hadn't yet recovered, but in the blink of an eye, it started crashing down. By the close, only about a thousand companies were up. This script doesn't add up! Clearly, it's a rate cut, so why has it become a "demon mirror" that exposes the market’s true form?

After careful analysis, I found that three events hit the market almost simultaneously—each one serious on its own. Stacked together, no wonder it didn't fall.

**Oracle suddenly "crashed," shaking faith in tech stocks**

The first blow came unexpectedly. After Oracle's after-hours earnings report, its stock price plummeted 11.5% instantly! Keep in mind, Oracle is no small player in cloud computing and AI. The earnings didn't meet expectations, especially as growth in AI-related businesses slowed down, the market panicked immediately.

How hot was the AI concept before? Valuations soared sky-high. Now, a "top student" suddenly flunks, and everyone's little plans are thrown into disarray: is this a sign that the bubble is bursting? Oracle's stumble is like pouring a bucket of ice water on the entire tech sector, with Nasdaq futures leading the decline. Just recently, AI was seen as the future printing press, and now the "model student" suddenly drops the ball—how can people not panic?

**Rate cuts happened, but the subsequent "pie in the sky" promises are too stingy**

The Federal Reserve did indeed cut rates and mentioned expanding its balance sheet—printing money to buy bonds and injecting liquidity into the market. Sounds great, but the problem lies in that "dot plot."

What is that? Simply put, it's the forecast from Fed officials about future interest rates based on voting. The dot plot released last night shows that by the end of 2026, there's a high probability of only one more rate cut!

What was the market expecting? A rate cut cycle, with cuts coming one after another, lowering the cost of capital, and naturally benefiting the stock market. But the Fed said, "Don’t get your hopes up; maybe only one cut by 2026." It’s like eagerly expecting a year-end bonus, only to be handed a red envelope—yes, there’s some, but not enough to fill your teeth gap.

The supposed benefits of rate cuts? Completely offset—or even turned into a negative—by this stingy forward guidance. The market immediately voted with its feet.

**Japan's rate hike expectations heat up, triggering a global capital shift**

The third heavy blow comes from across the Pacific. Recently, news about Japan’s potential end to negative interest rates and beginning to hike rates has been fermenting. This morning, even more intense: a former BOJ official openly said they expect rates to rise four times by 2027!

Why does this matter so much? The core is the "yen carry trade." For years, Japan's ultra-low (even negative) interest rates led international investors to borrow super-cheap yen, convert to dollars or other currencies, and invest in US stocks, European stocks, or emerging markets.

Now, with the BOJ shifting stance, two things happen:
- The cost to borrow in yen will rise
- The yen might appreciate

These two factors together mean those who borrowed yen to invest abroad will be forced to unwind their positions—sell off US stocks, Asia-Pacific stocks, and convert back to yen to pay debts. This action directly depresses global risk assets. Meanwhile, capital flows back into Japan, draining liquidity from other markets.

The collision of the Fed's rate cuts (potential dollar weakening) and Japan’s rate hikes (yen strengthening) signals a narrowing "interest rate differential," increasing the motivation for arbitrage unwinding.

**Three hammers hitting together**

To sum up today’s "series of blows":
- **Oracle’s crash**: shattered the market’s dream of rapid AI growth, taking down tech stocks collectively
- **Fed’s "hawkish rate cut"**: the cut happened, but its conservative attitude about the future disappointed the market
- **Japan’s rate hike expectations**: ignited the large-scale unwinding of "yen carry trades," triggering global capital withdrawal from stocks, cryptocurrencies, and other risk assets, flowing back to Japan

On the surface, it seems the rate cut "trapped" the market, but in reality, it’s fears over AI valuation bubbles, disappointment with the Fed’s future moves, and Japan’s policy shift that caused a global capital reshuffle—three cold currents hitting simultaneously, instantly extinguishing the "rate cut expectation" hot fire, bringing a bone-chilling cold.

Next, the market needs time to digest these factors. In particular, the true stance and ongoing capital flows of the Bank of Japan will be key points to watch. As retail investors, better buckle up, watch more and act less, and wait for the turbulence to settle.