FX.co ★ Oracle boosts tech gains, banks raise bar for S&P 500

Wall Street Hits Fresh Highs

The S&P 500 and Nasdaq closed at record levels on Wednesday, driven by a powerful surge in Oracle shares and cooler-than-expected US inflation data. Investors interpreted this as a strong signal that the Federal Reserve is likely to cut interest rates next week.

Oracle's Breakthrough

Oracle stock skyrocketed more than 36 percent in a single session, marking its biggest daily jump since 1992. The rally came after the company reported a sharp increase in demand for its cloud services, particularly from businesses developing artificial intelligence solutions. Oracle's market value reached 922 billion dollars, surpassing Eli Lilly, JPMorgan Chase, and Walmart, and moving closer to Tesla's 1.12 trillion.

AI Boom Fuels Chipmakers

The AI momentum also lifted semiconductor stocks. Nvidia rose nearly 4 percent, Broadcom surged 10 percent, and AMD added about 2.5 percent. The PHLX semiconductor index gained 2.3 percent, setting a fresh record.

Power Suppliers Join the Rally

Energy companies supplying data centers were also among the winners. Shares of Constellation Energy, Vistra, and GE Vernova advanced more than 6 percent each.

Apple Faces Pressure

Not all tech giants benefited from the rally. Apple shares slid more than 3 percent, marking their fourth consecutive decline. Many investors remain unconvinced about Apple's ability to catch up in the race for AI dominance.

Rate cut bets gain momentum

Producer price data in the United States came in softer than expected, giving markets fresh momentum. Traders are increasingly confident that the Federal Reserve is preparing to launch interest rate cuts in the near future.

Labor market cools

Recent employment figures reinforced the view that the US labor market is slowing. This has strengthened expectations that the Fed will take a more accommodative stance on monetary policy.

Fed meeting outlook

Market participants are almost unanimous: a rate cut of at least 25 basis points is expected at next week's policy meeting. According to CME FedWatch, the likelihood of a larger move — a 50 basis point cut — stands at about 10 percent.

Mixed performance across indexes

The S&P 500 gained 0.30 percent to close at 6532.04, marking a second consecutive record high. The Nasdaq added 0.03 percent, finishing at 21,886.06 and notching its third straight record close. In contrast, the Dow Jones Industrial Average slipped 0.48 percent to 45,490.92.

Sector losses weigh on the market

Out of 11 S&P 500 sectors, six ended the session lower. Consumer discretionary stocks led the decline with a drop of 1.58 percent, followed by consumer staples, which fell just over 1 percent.

Inflation data in focus

Attention now turns to the upcoming consumer price index report, scheduled for release on Thursday. Investors hope it will provide clearer guidance on the trajectory of inflation in the US.

Banks lift forecasts

Both Barclays and Deutsche Bank raised their year-end targets for the S&P 500, citing stronger corporate earnings, solid US economic growth, and sustained optimism around artificial intelligence.

Synopsys shares plunge

Synopsys stock collapsed by 36 percent, marking the steepest one-day decline in the company's history. The drop followed weaker-than-expected quarterly revenue results that disappointed Wall Street. Shares of rival Cadence Design Systems also slipped, losing 6.4 percent.

Europe adopts cautious stance

European equities edged higher on Thursday as investors awaited the European Central Bank's policy decision and a key US inflation report due later in the day.

STOXX 600 posts slight gain

By 07:11 GMT, the pan-European STOXX 600 index was up 0.1 percent, closing in on 553.03 points. Personal and household goods stocks led the way with a 0.5 percent advance.

Boost from fashion sector

The sector found support in Kering shares, which rose 1.5 percent. The Gucci owner announced it would postpone a full acquisition of Italian fashion house Valentino until at least 2028. The delay of the costly deal eased concerns over the group's debt burden.

ECB decision in spotlight

The market's main focus remains the European Central Bank's rate announcement, expected at 12:15 GMT.

Covestro rallies on ADNOC developments

Shares of Covestro jumped 6.3 percent following reports that Abu Dhabi's state-owned oil major ADNOC is taking steps to resolve a dispute linked to the European Union's subsidy investigation. The probe is tied to ADNOC's 14.7 billion euro, or 17.19 billion US dollar, bid to acquire the German chemicals group.

Inflation data in focus

As the session progresses, investor attention is set to turn to US consumer inflation figures. Economists anticipate price growth in August, but analysts believe this is unlikely to derail the long-awaited interest rate cut by the Federal Reserve expected next week.