NEW YORK: The S&P 500 and the Nasdaq scaled fresh intraday record highs on Wednesday driven by a surge in cloud computing firm Oracle, while cooler-than-expected inflation data kept the US Federal Reserve on track to cut borrowing costs this year.
Oracle soared 41 percent to an all-time high and was set for its biggest one-day percentage gain since 1992 after the tech company pointed to a demand surge from AI firms for its cloud services.
Its stock market value reached USD969 billion - leapfrogging those of Eli Lilly JPMorgan Chase and Walmart - and is approaching Tesla’s USD1.14-trillion market value.
Chip stocks gained, with Nvidia rising 4.3 percent, Advanced Micro Devices up 3.8 percent and Broadcom adding 9.6 percent.
The gains boosted the S&P 500 technology sector 2.1 percent, while the broader semiconductor index rose 2.6 percent to touch a record high.
Data center power suppliers also benefited, with Constellation Energy up 8 percent, Vistra advancing 9 percent and GE Vernova rising 6.2 percent.
A cooler-than-expected producer prices reading provided additional momentum as traders shored up their bets on interest-rate cuts this year.
Recent labor market data has confirmed the US jobs market is in a slowdown, cementing expectations for at least a quarter-point rate cut in September.
Bets on a 25-basis-point reduction at the Fed’s September 16-17 meeting stood at 90 percent, while those on a larger 50-bps cut were at about 10 percent, CME’s FedWatch tool showed.
Declines in consumer discretionary and healthcare stocks weighed on the Dow.
At 11:53 a.m. ET, the Dow Jones Industrial Average fell 197.88 points, or 0.43 percent, to 45,513.46, the S&P 500 gained 32.77 points, or 0.50 percent, to 6,545.38, and the Nasdaq Composite rose 93.85 points, or 0.43 percent, to 21,973.34.
Investors will now focus on the consumer prices reading, 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 labor 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.
Rizzuto said any upside inflation with Thursday’s CPI report could disrupt the bets on Fed rate cuts in 2025.
The S&P 500 posted 19 new 52-week highs and six new lows, while the Nasdaq Composite recorded 97 new highs and 43 new lows.
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