U.S. stocks mostly rose on Wednesday, fueled by Oracle's impressive revenue forecast and surprisingly cool wholesale inflation data. The S&P 500 and Nasdaq Composite both reached new record highs, while the Dow Jones Industrial Average saw a slight dip from its recent peak.
Oracle's AI Boost
Oracle (ORCL) shares soared over 36% after the company announced a significant increase in cloud revenue, driven by strong demand from AI-related bookings. This surge has ignited optimism that the AI infrastructure build-out is accelerating, potentially fueling further stock market gains.
Wholesale Inflation Cools Down
In a surprising turn, wholesale inflation declined last month, with the Producer Price Index (PPI) showing a month-over-month decrease against expectations of a 0.3% increase. Year-over-year, the PPI rose by 2.6%, also below the anticipated 3.3%. This data strengthens the argument for the Federal Reserve to consider cutting interest rates at its meeting next week.
CPI Data on Deck
The upcoming Consumer Price Index (CPI) release on Thursday will be the final piece of the puzzle before the Fed's policy decision. Investors are closely watching this data to assess inflationary pressures and anticipate the Fed's next move.
Labor Market Weakness Confirmed
Recent revisions to U.S. job numbers confirmed weakness in the labor market, solidifying expectations of a September rate cut and driving a stock market rally.
Fed Rate Decision Looms
Fed governor Lisa Cook is expected to participate in the upcoming rate decision, despite President Trump's attempts to remove her. A judge blocked Trump's efforts, which were allegedly motivated by a desire for lower interest rates.
Trade Tensions Persist
President Trump continues to pressure the EU on trade, adding another layer of complexity to the economic outlook.