Stocks concluded Wednesday’s trading session with a mixed performance, as two of the three major indexes achieved new record closing highs. Central to the day’s developments was a positive report on wholesale prices and a broader surge in artificial intelligence (AI) stocks. Market participants also closely monitored the latest market offerings.
The Bureau of Labor Statistics released data indicating that the Producer Price Index (PPI), which reflects what businesses pay suppliers for goods, decreased by 0.1% from July to August. This figure came in below economists’ forecast of a 0.3% increase, with the year-over-year PPI rising by 2.6%.
Bill Adams, chief economist for Comerica Bank, commented on the report, attributing the weaker-than-expected PPI to diminished pricing pressures from imported goods. He noted that “other factors like lower energy prices and modest domestic demand are slowing the pass-through of tariff prices to the real economy.” Adams suggested that this report may indicate that the upcoming Consumer Price Index (CPI) for August could also fall short of market expectations, thereby bolstering the case for the Federal Reserve to lower interest rates at its next meeting. Currently, market estimates indicate a 90% probability that the Fed will reduce the federal funds rate by a quarter percentage point by next Wednesday, with a 10% chance of a cut of half a percentage point.
In individual stock news, Oracle Corporation’s shares soared by 36%—marking the company’s most significant rise in 32 years—following the announcement of its fiscal first-quarter earnings. Although Oracle’s earnings of $1.47 per share and revenue of $14.9 billion were less than analysts anticipated, its optimistic outlook resonated well with investors. CEO Safra Catz reported signing four multi-billion-dollar contracts during the quarter, resulting in a remarkable 359% increase in the company’s remaining performance obligation (RPO) backlog, which now stands at $455 billion. Catz characterized the quarter as “astonishing” and projected a 77% growth in Oracle Cloud Infrastructure revenue for the fiscal year, expecting it to reach $18 billion and eventually $144 billion in four years. Following the earnings release, BofA Securities upgraded Oracle shares from Neutral to Buy, citing its substantial backlog growth and recognizing Oracle’s strong positioning within the expanding AI infrastructure market. This surge in Oracle’s stock also boosted other major AI firms, including Nvidia, Broadcom, and Palantir Technologies.
On another front, Klarna made its debut on Wall Street after pricing its initial public offering (IPO) at $40 per share, exceeding initial expectations and raising $1.37 billion—making it one of the year’s largest IPOs thus far. Trading opened with KLAR stock at $52, peaked at $57.20 intraday, and ultimately closed at $45.82. Although this first-day performance was notable, it did not match the dramatic rises of other recent IPOs, such as Figma and Circle Internet Group. Nonetheless, Phil Haslett, co-founder and chief strategy officer at Equityzen, remarked that a modest opening gain is an encouraging sign that the offering was appropriately priced and that there is genuine enthusiasm for the business.
In terms of the main indexes, the S&P 500 closed up 0.3% at 6,532 and the Nasdaq Composite rose slightly by 0.03% to finish at 21,886, both marking new record highs. On the contrary, the Dow Jones Industrial Average fell by 0.5% to 45,490, weighed down significantly by a drop in Apple shares, which fell by 3.2% following the company’s iPhone 17 launch event. Analyst Laura Martin from Needham expressed skepticism about iPhone sales targets, stating that she found little at the launch that would compel an increase in sales forecasts. Martin underscored the view that Apple’s heavy reliance on the iPhone as its flagship product means that the stock may face difficulties until the next cycle of iPhone replacements begins.
