The S&P 500 touched record levels on Wednesday after wholesale inflation unexpectedly fell, fuelling hopes that the Federal Reserve will deliver another rate cut as soon as next week. The benchmark index closed up 0.3% at 6,532.04 after peaking earlier at 6,555.97, an all-time intraday high. The Nasdaq Composite also finished at a record, adding 0.03% to 21,886.06. The Dow Jones Industrial Average lagged, dropping 220 points, or 0.5%, to 45,490.92, weighed down by weakness in Apple shares after a lacklustre iPhone launch.
Producer prices surprise to the downside
Investor sentiment was buoyed by the August producer price index, which showed a 0.1% decline. Economists had expected a 0.3% rise. Excluding food and energy, so-called core PPI also fell 0.1%, again missing forecasts.
It was the first drop in four months and comes ahead of Thursday’s more closely watched consumer price index. Economists anticipate CPI rising 0.3% in both headline and core terms, which would push the annual rate to 2.9% while leaving the core steady at 3.1%.
Rate cut hopes rise
The softer-than-expected data has strengthened the case for further Fed easing. Traders see a quarter-point cut at next week’s meeting as a certainty, with growing bets on a half-point move.
Oracle leads tech surge
Markets also saw fireworks from Oracle. The software giant’s shares soared 36%, their best day since 1992, after it reported a surge in demand for multicloud database services. Revenue from partnerships with Amazon, Google and Microsoft jumped more than 1,500% last quarter, underpinned by appetite for artificial intelligence infrastructure. The rally spilled over to chipmakers, with Nvidia up nearly 4%. Despite those gains, more stocks in the S&P 500 declined than rose by the close.
Australian outlook and global agenda
Australian shares are set to open weaker. ASX 200 futures point down 20 points, or 0.2%, to 8,805.
Looking ahead, investors await Thursday night’s US CPI release and the European Central Bank’s policy meeting. Analysts expect the ECB to keep rates steady, but with a more cautious approach to future easing.
