Traders exhibited a mix of optimism and caution in Tuesday night’s trading, as S&P 500 futures saw a slight uptick of 0.2%, buoyed by a positive forecast from Oracle. Meanwhile, Nasdaq 100 futures increased by 0.1%. In contrast, futures linked to the Dow Jones Industrial Average experienced a decline, falling 49 points, or 0.1%.
The previous day recorded significant gains across all three major indexes, with the S&P 500 climbing 0.27%. The Nasdaq Composite rose by 0.37%, while the Dow Jones Industrial Average appreciated by 196.39 points, or 0.43%. The latter was notably supported by a surge in UnitedHealth shares.
Oracle’s stock experienced a remarkable 26% rise in after-hours trading, following the company’s announcement of a staggering 1,529% growth in multicloud database revenue from major players like Amazon, Google, and Microsoft. This surge was attributed to heightened demand for AI servers. Despite a miss on earnings projections, investors responded positively to the company’s cloud outlook. Oracle’s CEO, Safra Catz, emphasized the company’s success, stating, “We signed four multi-billion-dollar contracts with three different customers in Q1… It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build.” Following this news, other tech firms associated with AI also saw stock increases, with Nvidia up nearly 2%.
Looking ahead, traders are awaiting the release of the latest producer price index on Wednesday, which, alongside the consumer price index report anticipated for Thursday, will provide valuable insights into inflation trends within the U.S. economy. Economists predict a monthly increase of 0.3% across the board, including both headline and core indexes that omit volatile food and energy prices. If these forecasts hold true, the annual headline Consumer Price Index (CPI) rate could reach 2.9%, while the core reading is expected to remain steady at 3.1%.
Market analysts suggest that if inflation data aligns with these estimates, it could pave the way for the Federal Reserve to implement another interest rate cut in their upcoming September meeting. Art Hogan, chief market strategist at B. Riley Wealth Management, noted that any unexpected spikes in inflation would likely need to be significantly pronounced to alter the current expectation of a rate reduction. “In general, the inflation news over the next couple of days would have to be remarkably hotter than anticipated for anything to change the narrative that we’re getting a rate cut in September,” he stated.
