Optimism rippled through the stock market on Wednesday following encouraging economic data and a promising forecast from tech giant Oracle.

S&P 500 futures jumped on Wednesday after a reading on wholesale prices unexpectedly declined, a welcome development for investors clamoring for a Federal Reserve rate cut next week to boost the economy. Oracle shares led the gains with a more than 30% premarket surge following an eye-popping forecast tied to artificial intelligence.

The positive momentum extended to other key market indicators. Nasdaq 100 futures also rose by 0.5%, while Futures tied to the Dow Jones Industrial Average edged higher. All three benchmarks had previously closed at record highs on Tuesday, with the Nasdaq also reaching a new intraday high during the trading session.

Wholesale Price Drop Fuels Rate Cut Hopes

The catalyst for the market’s upbeat mood was the latest producer price index (PPI) reading, which revealed a surprising 0.1% decrease in wholesale prices for August. This was a welcome surprise, as economists surveyed by Dow Jones had anticipated a 0.3% increase. Core PPI, excluding food and energy, also declined by 0.1%,defying expectations of a 0.3% rise.

This data point is being interpreted as a positive signal regarding the current state of inflation within the U.S. economy, notably as investors look ahead to Thursday’s consumer price index (CPI) report.

Economists anticipate the CPI report will reflect a 0.3% monthly increase, encompassing both the headline all-items index and the core reading, which excludes volatile food and energy prices. Should these projections materialize, the annual headline CPI rate is expected to climb to 2.9%, while the core reading is projected to remain steady at 3.1%.

Anticipation is building that the Federal Reserve will implement another rate cut at its September meeting if the CPI figures align with expectations. While a quarter percentage point cut had been widely anticipated, some traders are now speculating about a more substantial 50 basis point cut.

According to the CME Fedwatch tool, based on fed futures trading, traders have increased their bets on a potential half-point cut on Sept. 17,raising the odds from 7% to 10%. The market is pricing in a near-certainty of at least a quarter-point reduction by the central bank.

“This number now,if the Fed is truly data dependent,the question should be,’Why not 50?'”

Oracle’s AI Forecast Sparks Tech Rally

Adding to the market’s enthusiasm,Oracle shares experienced a significant surge of 31% after the company revealed that its multicloud database revenue from Amazon,Google,and Microsoft had grown by an impressive 1,529% in the last quarter,driven by strong demand for AI servers.

Investors also reacted positively to Oracle‘s optimistic cloud forecast, even though its latest earnings fell short of expectations. The company anticipates cloud infrastructure revenue to reach $144 billion in the 2030 fiscal year, a substantial increase from $10.3 billion in fiscal 2025.

“We signed four multi-billion-dollar contracts with three different customers in Q1,” Oracle CEO Safra Catz said. “It was an astonishing quarter – and demand for Oracle Cloud Infrastructure continues to build.”

nvidia and AMD also saw gains in premarket trading, as investors appeared to be reinvesting in the artificial intelligence sector.