U.S. stocks traded higher on Wednesday, with tech stocks leading the charge after Oracle’s blockbuster revenue forecast and a softer-than-expected wholesale inflation report. The S&P 500 (GSPC) rose 0.38%, while the Nasdaq Composite (IXIC) climbed 0.22%, both extending gains near record highs. Meanwhile, the Dow Jones Industrial Average (DJI) dipped, falling 0.51% as its industrial-heavy composition offered less exposure to the tech rally.
Investors w cooler-than-expected wholesale inflation numbers released earlier this week. The Producer Price Index (PPI) showed a month-over-month decline, reinforcing speculation that the Federal Reserve may be more inclined to cut interest rates next week. Economists argue that declining inflation in combination with steady labor market trends could support a more accommodative Fed policy, which in turn has helped lift tech and AI-related stocks.
Market Movers:
- Oracle (ORCL) +39.64%: Shares surged over 40% as the software giant reported a massive increase in its backlog of contracted AI cloud work. While quarterly earnings and revenue missed analyst expectations, investors focused on the booming demand for AI infrastructure, driving the stock sharply higher.
- GameStop (GME) +5.58%: The videogame retailer jumped nearly 6% after posting fiscal second-quarter adjusted earnings of 25 cents per share on $972.2 million in revenue. The results beat some expectations, and the stock benefited from renewed investor interest in GameStop’s turnaround strategy.
- Synopsys (SNPS) -35.88%: Shares plunged nearly 36% following weaker-than-expected fiscal third-quarter earnings and revenue. The company issued mixed guidance for the current quarter, disappointing investors who had anticipated stronger results from the chip design software business.
- Wolfspeed (WOLF) -15.27%: The semiconductor firm dropped over 15% after a recent rally, despite announcing that its bankruptcy reorganization plan was approved. Investors remain cautious as the company prepares to emerge from Chapter 11 protection in the coming weeks.
- Wearable Devices +438%: Shares of the AI-powered wristband maker soared over 400% after reporting a smaller loss per share of $2.30 versus $16.52 earlier this year. Revenue fell slightly, but the market focused on the rapid improvement in profitability.
- Rubrik -15%: Shares fell despite the company reporting a much narrower-than-expected quarterly loss and revenue above forecasts. Investors seemed cautious, focusing on the broader challenges facing the data-security sector.
- Chewy (CHWY) -14%: Shares of the online pet retailer tumbled 14% as investors digested weaker-than-expected guidance for upcoming quarters. Despite steady revenue growth, concerns about e-commerce spending and margin pressure weighed on the stock.
Inflation Data Boosts Rate-Cut Optimism
Investors welcomed cooler-than-expected wholesale inflation numbers. The Producer Price Index (PPI) showed a month-over-month decline, reinforcing speculation that the Federal Reserve may be more inclined to cut interest rates next week. Economists argue that declining inflation in combination with steady labor market trends could support a more accommodative Fed policy, which in turn has helped lift tech and AI-related stocks.
AI Infrastructure Drives Tech Optimism
Beyond inflation, market sentiment was buoyed by Oracle’s surge and other AI-related corporate activity. Analysts point out that companies investing heavily in AI infrastructure may drive a new wave of productivity gains, supporting higher valuations in cloud computing and semiconductor sectors. As AI adoption accelerates across enterprise customers, firms like Oracle and Wearable Devices are seen as key beneficiaries of long-term secular trends in technology.
Looking Ahead
Investors are now closely watching upcoming economic releases, including consumer price index data and retail sales figures, which may influence Fed expectations and market positioning. Corporate earnings will continue to dominate headlines, especially in sectors exposed to AI and technology investments. Investors will likely remain attuned to developments in inflation, interest-rate guidance, and AI adoption trends, which could dictate market direction in the weeks ahead.