The S&P 500 and the Nasdaq hit intraday record highs on Wednesday after cooler-than-expected inflation data kept the U.S. central bank on track to cut borrowing costs this year, while a surge in cloud computing firm Oracle added to gains.
U.S. producer prices fell unexpectedly in August, dragged lower by a decline in the cost of services, with traders shoring up their bets on interest-rate cuts this year.
Bets on a 25-basis-point reduction at the U.S. Federal Reserve’s September 16-17 meeting stood at 90%, while those on a larger 50-bps cut were at about 10%, CME’s FedWatch tool showed.
“Any and all signs that inflation is coming down… (are) welcomed with a big please and thank you from the market and from the Fed,” said Adam Sarhan, chief executive of 50 Park Investments.
“The fact that producer prices, which are more prone to the tariffs, came down, that’s bullish for stocks… It gives the Fed more room to cut rates.”
Oracle surged 35% to a record high, and was set for its biggest one-day percentage gain since 1992, after saying it expected booked revenue at its Oracle Cloud Infrastructure business to exceed half a trillion dollars.
Some chipmakers rose on the news, with Nvidia rising 3.6%, Advanced Micro Devices up 3.1% and Broadcom adding 6.2%.
The gains boosted technology stocks 1.8%, while the broader semiconductor index gained 2.2% to touch a record high.
Data center power suppliers also benefited from Oracle’s upbeat forecast. Constellation Energy was up 5%, Vistra advanced 5.1% and GE Vernova rose 5%.
Oracle surges on AI cloud growth as customers race to secure computing capacity
Declines in consumer discretionary stocks weighed on the Dow.
At 09:41 a.m. ET, the Dow Jones Industrial Average .DJI fell 85.24 points, or 0.19%, to 45,626.10, the S&P 500 rose 31.47 points, or 0.48%, to 6,543.78, and the Nasdaq Composite 74.71 points, or 0.33%, to 21,952.25.
Markets will now focus on the U.S. consumer prices reading that is due on Thursday for insights on where U.S. inflation is headed.
Recent labor market data confirmed the U.S. jobs marketis in a slowdown, prompting traders to price in an at least 25-bps cut in interest rates in September.
Meanwhile, a federal judge on Tuesday temporarily blocked Trump from removing Fed Governor Lisa Cook, in a legal setback for the White House.
The three main indexes had closed at record peaks on Tuesday following a downward payrolls revision that kept rate-cut bets intact, while a rise in UnitedHealth’s shares aided gains.
Wall Street has had a broadly positive start to September – a month deemed historically bad for U.S. equities – with the benchmark index losing 1.5% on average since 2000, according to data compiled by LSEG.
Barclays raised its 2025 year-end target for the S&P 500, for the second time in three months, to 6,450 from 6,050.
In other stocks, Synopsys SNPS.O slid 33% after the chip design software provider missed Wall Street estimates for third-quarter revenue on Wednesday. Peer Cadence Design Systems CDNS.O fell 8.6%.
Advancing issues outnumbered decliners by a 2.03-to-1 ratio on the NYSE and by a 1.35-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and four new lows, while the Nasdaq Composite recorded 65 new highs and 20 new lows.
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