NEW YORK – U.S. stock markets pushed further into record territory on Wednesday, with futures indicating modest gains ahead of new inflation data. The positive sentiment was supercharged by Oracle (ORCL), whose blowout earnings report and bullish outlook fueled another rally in AI-related stocks.
On Tuesday, all three major indices closed at new highs, with the S&P 500 adding 0.27% to finish at 6,512.61, the Nasdaq Composite rising 0.37% to 21,879.48, and the Dow Jones Industrial Average (DJIA) climbing 0.43% to 45,711.34. The gains were underpinned by a favorable interest rate backdrop and strong momentum in the megacap tech sector.
Oracle's Surge Lifts U.S. Markets
The immediate catalyst for the market's strength was Oracle. The company's stock surged 26% in after-hours trading after its multicloud database update revealed that revenue from Amazon, Google, and Microsoft channels soared by an astonishing 1,529% last quarter, directly linked to demand for AI servers. CEO Safra Catz announced that Oracle had signed four multi-billion dollar contracts in the first quarter, reinforcing the case for sustained spending on AI infrastructure.
The news had a ripple effect across the AI sector, with shares of Nvidia (NVDA) gaining nearly 2% in late trading.
Inflation Data in Focus
The macroeconomic focus is now shifting squarely to inflation. Economists anticipate a 0.3% month-over-month increase for both the headline and core Consumer Price Index (CPI). The Producer Price Index (PPI) data will be released first, offering a glimpse into pipeline pressures, followed by the crucial CPI report on Thursday. The trajectory of inflation is critical, especially after a significant downward revision in jobs data reinforced expectations for a quarter-point rate cut by the Federal Reserve next week. Markets are looking for confirmation that disinflation is continuing without harming economic growth—a soft landing scenario that has supported stocks at record highs.
European and Asian Markets Follow Suit
European stocks opened slightly higher, tracking Wall Street's advance, though gains were capped by regional event risk. Investors are contending with an upcoming European Central Bank (ECB) decision, persistent political uncertainty in France, and ongoing developments in the Middle East.
Asian markets largely took their cue from the U.S. Japan's Nikkei 225 climbed 0.87% to a new all-time high, buoyed by optimism over policy continuity and corporate reforms. In China, while August inflation data pointed to weak domestic price pressures, stocks edged higher on the prospect of targeted government support. Hong Kong's Hang Seng Index outperformed as tech giants rallied on positive signals from their U.S. counterparts.
The market's leadership remains firmly anchored in AI infrastructure and megacap technology. The short-term test is inflation: consensus figures would likely affirm hopes for a soft landing and keep policy easing on the table, supporting equity valuations at or near record territory.
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