Oracle’s news about AI makes the S&P 500 and Nasdaq go up

This week, the US stock market showed signs of a new tech boom, with Oracle’s unexpected earnings beat and bold AI prediction sending shockwaves down Wall Street.   As the S&P 500 goes up and the Nasdaq 100 keeps going up, investors are becoming more willing to take risks because they think that AI will change cloud infrastructure.

Oracle’s gamble on AI sets off a firestorm in the tech sector

After Oracle Corporation posted better-than-expected Q4 profits, its shares soared by more than 11%. CEO Safra Catz said that Oracle’s AI cloud infrastructure business will rise by more than 70% by fiscal 2026.   This increase helped not only Oracle but also other big IT companies like Microsoft and IBM, which hit new all-time highs and added to the S&P 500’s momentum.

Oracle is now a real contender in the cloud environment, which used to be ruled by Microsoft Azure and Amazon Web Services. This is thanks to its strategic focus on generative AI and partnerships with Nvidia and Cohere.   Oracle’s news release says that the company expects huge demand from businesses looking for scalable, AI-native cloud solutions. This is a trend that has been seen in analyst reports across the industry.

Inflation going down makes them less worried about a rate hike

The Producer Price Index (PPI) for May went up at 0.1%, which is less than the expected 0.2%. This means that wholesale inflation is going down.   The Federal Reserve has less pressure on it now that bond yields have gone down as investors bet against future rate hikes.   Core PPI stayed the same, which supports the idea that monetary policy will be more cautious.

At the same time, the number of jobless claims stayed the same, with ongoing claims reaching their highest level since 2021.   This small rise shows that the job market is getting softer over time, which the Fed will probably keep an eye on before making policy changes.

The Dow and oil markets are sending mixed signals.

The Dow Jones fell because of an accident of an Air India Dreamliner, which caused Boeing’s value to drop by 7%.   At the same time, oil prices fell back after rising recently. WTI fell to $66.77 because of tensions in the Middle East and a cautious market attitude.

The future: AI momentum vs. trade uncertainty

Even while people are excited about technology, the whole market is still at risk from geopolitical shocks and trade policy uncertainty.   Investors are worried about what former President Donald Trump said recently about bringing back tariffs, even as talks with China are moving along.   Wells Fargo’s market analysts say that without a trade deal, rallies may run into trouble.

The climate for tech-led development seems to be still good, though, as AI momentum grows and inflation pressures ease.   Traders are now avidly watching for statements from the Fed and changes in global politics to figure out what the next big move will be.

Also read: Dollar falls as market watches US-China trade talks with caution