The S&P 500 reached a new record high on Wednesday after wholesale inflation unexpectedly declined, bolstering investor hopes for a Federal Reserve rate cut next week. Oracle led market gains with a dramatic 40% surge following a strong forecast tied to artificial intelligence growth, while Apple shares dragged the Dow lower.
Market Performance
The S&P 500 rose 0.4% and the Nasdaq Composite added 0.3%, both notching new all-time intraday highs. In contrast, the Dow Jones Industrial Average slipped 157 points, or 0.4%, as Apple’s latest iPhone launch disappointed investors. Tech stocks, particularly those linked to AI, provided the strongest momentum for the day’s rally.
Inflation Data Boosts Rate Cut Hopes
The producer price index (PPI) fell 0.1% in August, defying expectations of a 0.3% rise. Core PPI, which excludes food and energy, also dropped 0.1%. The data suggests inflationary pressures are easing, ahead of Thursday’s consumer price index (CPI) release. Economists expect a 0.3% monthly gain in both headline and core CPI, which would put annual inflation at 2.9% overall and 3.1% for core prices.
Lower inflation strengthens the case for the Federal Reserve to cut rates in September. According to futures trading, markets now fully expect at least a 25 basis point cut, with growing bets on a deeper 50 basis point reduction. Analysts said weaker employment data and cooling wholesale prices could push the Fed toward more aggressive easing.
Oracle Leads Tech Rally
Oracle shares surged more than 40% after reporting that its multicloud database revenue from Amazon, Google, and Microsoft grew by an extraordinary 1,529% in the latest quarter, driven by AI server demand. The company also projected $144 billion in cloud infrastructure revenue by fiscal 2030, up sharply from $10.3 billion in fiscal 2025. Despite missing on earnings, the upbeat forecast reassured investors and reignited AI enthusiasm.
Nvidia and AMD also posted gains, highlighting renewed momentum in the artificial intelligence sector. Investors continue to view AI as a powerful driver of growth across technology markets.
The combination of easing inflation and Oracle’s AI-fueled rally propelled the S&P 500 to record territory, reinforcing market optimism about the Fed’s upcoming decision. While uncertainties remain around the scale of rate cuts, investor appetite for AI-linked stocks shows no signs of slowing, positioning technology as the central force behind Wall Street’s latest surge.
