Traders work on the floor at the New York Stock Exchange on June 18, 2025.
Brendan McDermid | Reuters
The S&P 500 jumped to a fresh record on Wednesday after a reading on wholesale prices unexpectedly declined, a welcome development for investors clamoring for a Federal Reserve rate cut next week to boost the economy. Oracle shares led the gains with a more than 40% surge following an eye-popping forecast tied to artificial intelligence.
The broad market index climbed 0.4%, while the Nasdaq Composite rose 0.3%. The Nasdaq, alongside the S&P 500, had reached a new all-time intraday high in the trading day. The Dow Jones Industrial Average lost 157 points, or 0.4%, bogged down by a decline in Apple shares as the latest iPhone announcement failed to impress investors.
The latest producer price index reading showed that wholesale prices fell 0.1% in August. Economists polled by Dow Jones had estimated a 0.3% gain. Core PPI, which excludes food and energy prices, likewise declined 0.1%, while the consensus called for 0.3%.
The report serves as a positive sign heading into Thursday’s more closely watched consumer price index reading that inflation in the U.S. economy is cooling.
Economists expect the CPI report to show monthly increases of 0.3%, according to Dow Jones. This includes the headline index as well as the core reading that excludes volatile food and energy prices. If this materializes, the annual headline CPI rate would be pushed up to 2.9%, though the core reading is expected to stay unchanged at 3.1%.
If the numbers come in around these estimates, the Federal Reserve will have room to deliver another rate cut at its September meeting, according to CFRA Research’s Sam Stovall. Traders currently see a certainty that the Fed will cut by at least a quarter point, per the CME Fedwatch tool based on fed futures trading. They also increased their bets following the PPI data that the central bank could make an even deeper cut to rates, by 50 basis points, or a half percentage point.
“With the PPI surprising to the downside, with the employment data showing much greater softness than anticipated, that basically says that there could be a reason for the Fed to cut by 50 basis points,” Stovall said to CNBC. “What they want to do is to ensure that they are not going to be too slow, as the president describes Fed Chair Powell, and that they do at least keep up with or get ahead of the overall weakening trend.”
“That could, I think, certainly light a fire under the market between now and the end of the year,” the chief investment strategist added.
Oracle shares led the market higher after the tech old guard reported that multicloud database revenue from Amazon, Google and Microsoft grew at a whopping rate of 1,529% in its last quarter, fueled by demand for AI servers.
ORCL 5-day chart
Investors were encouraged by the company’s upbeat cloud forecast as well, even as its latest earnings fell short. Oracle expects to see $144 billion in cloud infrastructure revenue in the 2030 fiscal year, a substantial increase from $10.3 billion in fiscal 2025.
Nvidia and AMD were also higher, as investors appeared to pile into the artificial intelligence trade once again.
