Markets Edge Higher on Oracle and Fed Hopes
U.S. stocks rallied on Wednesday as investors balanced tech optimism with easing inflation data. The S&P 500 and Nasdaq Composite each rose about 0.5% to new record highs, while the Dow Jones Industrial Average slipped 0.3%, weighed down by fewer tech-heavy components.
The clear winner was Oracle (ORCL). Shares jumped more than 30% after CEO Safra Catz projected cloud revenue will surge on demand from “the who’s who of AI.” Despite missing quarterly earnings estimates, investors cheered the long-term bookings momentum, a sign the AI infrastructure build-out is hitting an inflection point.
Inflation Data Strengthens Case for Fed Cut
Wholesale inflation surprised to the downside, with the Producer Price Index (PPI) declining month-over-month instead of rising the 0.3% economists had expected. On a yearly basis, PPI rose 2.6%, well below the 3.3% consensus.
The softer print builds anticipation ahead of Thursday’s Consumer Price Index (CPI) release and the Fed’s policy meeting next week. Combined with Tuesday’s weaker jobs revision, markets are now almost fully pricing in a September interest rate cut.
Political and Trade Tensions in Focus
Monetary policy isn’t the only factor moving markets. Reports surfaced that Fed Governor Lisa Cook is expected to participate in next week’s meeting after a court ruling blocked attempts to remove her.
On the trade front, the administration is pressuring the EU to join the U.S. in imposing steep 100% tariffs on India and China. The move is designed to pressure Russia into renewed talks over the Ukraine conflict. Regional tensions escalated further as Poland shot down Russian drones that violated its airspace.
Earnings Roundup: GameStop Pops
In corporate earnings, GameStop (GME) shares surged after reporting more than 20% revenue growth. The results add another twist to the meme-stock favorite, which continues to attract retail enthusiasm despite a volatile trading history.
WSA Take
Wednesday’s action highlights the twin drivers powering U.S. markets right now: AI optimism and monetary policy expectations. Oracle’s blockbuster forecast shows that real spending on AI infrastructure is finally hitting corporate income statements — a major validation for the broader tech rally.
At the same time, cooling inflation and weak labor market data leave the Fed with little cover to delay a rate cut. That one-two punch — tech growth plus cheaper money — is exactly the cocktail investors have been betting on.
The question now is whether these twin narratives can sustain momentum if geopolitical risks — tariffs, drones, or Fed politics — start to overshadow the optimism.
Disclaimer
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