S&P 500, Nasdaq set to open higher on inflation data boost; Oracle soars

By Purvi Agarwal and Ragini Mathur

The S&P 500 and the Nasdaq were on track for a higher open on Wednesday after cooler-than-expected producer inflation data boosted bets on a September interest-rate cut by the Fed, while a surge in cloud computing firm Oracle added to gains.

U.S. producer prices fell unexpectedly in August, dragged down by a decline in the cost of services, with traders shoring up their bets on interest-rate cuts this year.

Bets on a 25-basis-point cut at the U.S. Federal Reserve's September 16-17 meeting stood at 90%, while those on a larger 50-bps cut were at about 10%, CME's FedWatch tool showed.

"Any and all signs that inflation is coming down... (are) welcomed with a big please and thank you from the market and from the Fed," said Adam Sarhan, chief executive of 50 Park Investments.

"The fact that producer prices, which are more prone to the tariffs, came down, that's bullish for stocks... It gives the Fed more room to cut rates."

Oracle ORCL jumped 31.5% in premarket trading after saying it expected booked revenue at its Oracle Cloud Infrastructure business to exceed half a trillion dollars, as demand for its low-cost cloud infrastructure services grew.

The ripple effect led to gains in some chipmakers, with Nvidia NVDA rising 3.2%, Advanced Micro Devices AMD up 4.4% and Broadcom AVGO adding 3.7%.

Data center power suppliers also benefited from the cloud computing giant's upbeat forecast. Constellation Energy CEG was up 2.4%, Vistra VST advanced 3.6% and GE Vernova GEV rose 3.9%.

Another key dataset, the U.S. consumer prices reading, is expected on Thursday.

Recent labor market data confirmed the U.S. jobs market is in a slowdown, prompting traders to price in an at least 25-bps reduction in borrowing costs in September. The August nonfarm payrolls reading has brought a 50-bps reduction to the table, with bets currently at 10.2%.

At 08:50 a.m. ET, Dow E-minis (YMcv1) were down 13 points, or 0.03%, S&P 500 E-minis ES1! gained 30.75 points, or 0.47%, and Nasdaq 100 E-minis NQ1! rose 122.75 points, or 0.51%.

Meanwhile, a federal judge on Tuesday temporarily blocked Trump from removing Fed Governor Lisa Cook, an early setback for the White House in an unprecedented legal battle that could potentially upend the central bank's long-held independence.

The three main indexes closed at record peaks on Tuesday following a downward payrolls revision that kept rate-cut bets intact, while a rise in UnitedHealth's UNH shares aided gains.

Wall Street has had a broadly positive start to September - a month deemed historically bad for U.S. equities - with the benchmark index losing 1.5% on average since 2000, according to data compiled by LSEG.

Reflecting the growing optimism around U.S. markets, Barclays raised its 2025 year-end target for the S&P 500, for the second time in three months, to 6,450 from 6,050.

In other stocks, Synopsys SNPS slid 24% before the bell after the chip design software provider missed Wall Street estimates for third-quarter revenue on Wednesday.

Peer Cadence Design Systems CDNS slipped 4.5%.

GameStop GME added 7.4% after the video game retailer reported higher second-quarter revenue.