The S&P 500 clinched a second-straight record close Wednesday, as Oracle led tech stocks higher following strong guidance and an unexpected cooling in wholesale inflation supported ongoing expectations for the Federal Reserve to cut interest rates next week.
At 4:00 ET (20:00 GMT), the Dow Jones Industrial Average traded 220 points, or 0.3%, lower, while the S&P 500 index gained 0.3% to close at a record of 6,533.06. The NASDAQ Composite was up 0.03%.
A sharp downward revision to U.S. employment figures for the 12 months through March suggested that a possible cooling in the labor market may have been taking place even before President Donald Trump unveiled sweeping import tariffs in April. Bets that the Fed will slash rates by at least 25 basis points at its September 16-17 gathering were little changed following the numbers, while U.S. Treasury yields, which tend to move inversely to prices, moved higher.
Oracle soars on strong earnings
In the corporate sector, Oracle (NYSE:ORCL) stock jumped sharply with investors excited by a bullish AI-backed outlook.
Oracle’s MultiCloud database revenue, driven through partnerships with hyperscalers such as Amazon, Google, and Microsoft, surged an astonishing 1,529% in the quarter
The company said it now expects booked revenue at its Oracle Cloud Infrastructure division to surpass half-a-trillion dollars, a robust forecast which analysts said was a sign of solid demand for the group’s relatively low-cost, AI-powered offerings.
"While investors were expecting an incremental ~$120bn in RPO related to the $30bn ARR deal with OpenAI revealed in June, the company instead added $317bn q/q driven by four multi-billion contracts with three customers and now expects backlog to exceed $0.5 trillion in the coming months as additional deals are expected to be signed," Deutsche Bank said in a recent note.
The strong outlook for AI-led revenue fueled a bid in AI-related hardware stocks including NVIDIA Corporation (NASDAQ:NVDA), Broadcom Inc (NASDAQ:AVGO), CoreWeave Inc (NASDAQ:CRWV), and Dell Technologies Inc (NYSE:DELL).
GameStop (NYSE:GME) shares rose after the electronics retail company delivered a surprisingly strong second quarter, with revenue rising 22% to $972.2 million from a year earlier.
Elsewhere, Apple Inc (NASDAQ:AAPL) shares slipped as the tech giant unveiled its iPhone 17 lineup and refreshed Apple Watch and AirPods, including the much-anticipated ultrathin “iPhone Air” model.
Apple’s iPhone 17 Pro will start at $1099, up $100 from the previous pro model, in line with analyst expectations. The tech giant also unveiled a $999 iPhone Air, which replaces the iPhone 16 Plus. The price of Apple’s entry-level iPhone 17 was kept at $799.
Synopsys Inc (NASDAQ:SNPS) stock slumped after the chip design software provider missed Wall Street estimates for third-quarter revenue on Wednesday, and Chewy (NYSE:CHWY) stock dropped sharply after the online pet retailer’s second-quarter report disappointed investors who were expecting more.
PPI unexpectedly cools in August
Adding to this positive sentiment, U.S. factory-gate prices unexpectedly fell in August, pointing to easier-than-anticipated inflationary pressures that could bolster the case for the Federal Reserve to slash interest rates at its upcoming policy gathering.
The producer price index decreased by 0.1% last month, according to data from the Bureau of Labor Statistics on Wednesday. Economists had anticipated that the month-on-month figure would climb by 0.3% in August, following a downwardly-revised rise of 0.7% in July.
"The cooler-than-expected PPI report was largely the result of a decline in services costs in August with services costs falling 0.2%, marking the largest monthly drop since April," Stifel said in a recent note.
Investors keep close tabs on the PPI gauge because a section of the data is used to determine a metric of inflation that is preferred by the Fed.
The more widely-watched consumer price index (CPI) is due on Thursday.
Traders now fully see a chance that the Fed will lower rates by at least 25 basis points next week, according to CME’s FedWatch tool. Odds of a more aggressive 50 basis point cut have also risen.
Source :
https://www.investing.com/news/stock-market-news/us-stock-futures-mixed-after-wall-st-record-close-amid-fed-easing-bets-4232476
