Bengaluru/San Francisco — The S&P 500 notched a second straight record close on Wednesday, as Oracle surged and cooler-than-expected inflation data supported expectations the US Federal Reserve will cut interest rates next week.
Oracle soared in its biggest one-day percentage gain since 1992 after the tech company pointed to a demand surge from artificial intelligence (AI) firms for its cloud services.
Its stock market value reached as high as $970bn, leapfrogging the values of Eli Lilly, JPMorgan Chase and Walmart, and approaching Tesla’s $1.1-trillion market value.
AI-related chip stocks also rallied, with Nvidia, Broadcom and Advanced Micro Devices all gaining. The PHLX chip index hit a record high.
Data centre power suppliers also benefited, with Constellation Energy, Vistra and GE Vernova climbing.
Apple, viewed by many investors as lagging in the race to dominate AI, declined for a fourth straight session. A cooler-than-expected producer prices reading provided additional momentum as traders shored up their bets on interest rate cuts this year. Recent labour market data has confirmed the US jobs market is in a slowdown.
Traders expect the Fed to cut interest rates by at least 25 basis points (bps) at its policy meeting next week, with a 10% chance the central bank could cut by 50 bps, CME’s FedWatch tool showed.
The S&P 500 has now climbed about 11% in 2025, while the Nasdaq has rallied about 13%.
“The fundamentals remain very strong in the equity markets, domestically. But we also have to acknowledge that valuations are extended at this point and serve as some natural tension to a continued upward trajectory,” said Bill Northey, senior investment director at US Bank Wealth Management in Billings, Montana.
According to preliminary data, the S&P 500 gained 19.72 points, or 0.30%, to end at 6,532.33 points, while the Nasdaq Composite gained 5.27 points, or 0.02%, to 21,884.75. The Dow Jones industrial average fell 219.15 points, or 0.48%, to 45,492.19.
Investors will now focus on consumer prices data due on Thursday, for insights on where US inflation is headed.
“Combining the softer data (PPI figures) with the Fed’s increased emphasis on the labour market side and the growing trend we’ve seen in downward revisions to the monthly employment data — all support the expectation for a rate cut,” said Jordan Rizzuto, CIO at GammaRoad Capital Partners.
In a setback for the White House, a federal judge on Tuesday temporarily blocked US President Donald Trump from removing Fed governor Lisa Cook.
Barclays and Deutsche Bank raised their year-end targets for the S&P 500, citing stronger corporate earnings, resilient US economic growth and optimism around artificial intelligence.
Synopsys tumbled in its biggest one-day decline on record after the chip design software provider missed Wall Street estimates for quarterly revenue. Rival Cadence Design Systems also fell.
Reuters
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