Wall Street inches up to more records as inflation slows and Oracle soars

NEW YORK (AP) - Wall Street closed mostly higher to notch more records. The S&P 500 added 0.3% Wednesday and set an all-time high for a second straight day. The Dow Jones Industrial Average fell 0.5%, and the Nasdaq composite inched up less than 0.1% to add to its record set the day before. Oracle helped lead the way after giving a stunning forecast for revenue growth in upcoming years, but a drop for Apple weighed on indexes. Treasury yields eased following a surprisingly encouraging report on inflation at the wholesale level. That backed expectations for coming cuts to interest rates.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

NEW YORK (AP) - Wall Street is holding near its records on Wednesday following a surprisingly encouraging report on inflation and a stunning forecast for growth from Oracle because of the artificial-intelligence boom.

The S&P 500 added 0.1% and was on track to set an all-time high for a second straight day. The Dow Jones Industrial Average was down 280 points, or 0.6%, with a little more than half an hour remaining in trading, and the Nasdaq composite was 0.2% lower after both likewise set records the day before.

Stocks have set records in large part because Wall Street is expecting the economy to pull off a delicate balancing act: slowing enough to convince the Federal Reserve to cut interest rates, but not so much that it causes a recession, all while inflation remains under control.

Many things must go right for that to happen, and an encouraging signal came from a report on Wednesday saying inflation at the U.S. wholesale level unexpectedly slowed in August. It's a relief following months of data suggesting inflation would be tough to get under the Fed's target of 2%, particularly with President Donald Trump's tariffs pushing upward on prices.

A potentially more important report is coming Thursday, which will show how bad inflation has been for U.S. households, but Wednesday's update "essentially rolled out the red carpet for a Fed rate cut next week," according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Traders were already convinced the Fed will deliver its first cut to interest rates of the year at its next meeting, but they need the inflation data until then to come up mild enough not to derail those expectations. That's because cuts to interest rates can push inflation higher, along with giving the economy a kickstart, and hot inflation could tie the Fed’s hands.

"The broader narrative is increasingly anchored on expectations that the Fed will deliver a rate cut at next week's meeting," said Ahmad Assiri, research strategist at Pepperstone.

On Wall Street, tech stocks led the way after Oracle said AI-related demand is set to send its revenue surging. CEO Safra Catz said Oracle signed four multi-billion dollar contracts during its latest quarter, and it expects cloud infrastructure revenue to jump 77% to $18 billion this fiscal year. After that, it expects such revenue to soar to $144 billion in just four years.

"AI Changes Everything," Oracle Chairman Larry Ellison said in a statement.

Oracle stock leaped 36.3% and was heading toward its best day since 1992, even though it also reported results for the latest quarter that came up just shy of analysts' expectations.

Taiwan Semiconductor Manufacturing Co., which makes chips used in AI and other computing, saw its stock that trades in the United States climb 3.4% after it said its revenue jumped nearly 34% in August from a year earlier.

Klarna, the Swedish "buy now, pay later" financial services provider, jumped 14% in its first day as a publicly traded stock on the New York Stock Exchange.

On the losing side of Wall Street was Apple, whose drop of 3.59% helped drag the Dow lower and was the heaviest weight on the S&P 500. Some analysts said its unveiling of new iPhones the day before contained no surprises and may not drive much growth in demand.

Synopsys, which helps customers design and engineer chips, fell 36.1% after reporting profit for the latest quarter that fell short of analysts' expectations. So did its forecast for profit in the current quarter.

Novo Nordisk's stock that trades in the United States slipped 0.3% after the company behind the Wegovy weight loss drug said it would cut 9,000 jobs to reduce costs, mostly in its home country of Denmark. It's been contending with more competition in the market to help obese people lose weight.

In stock markets abroad, indexes were mixed in Europe after rising across much of Asia. South Korea's Kospi rose 1.7%, and Hong Kong Hang Sang climbed 1% for two of the bigger moves.

In the bond market, the yield on the 10-year Treasury eased to 4.03% from 4.08% late Tuesday after the encouraging report on wholesale inflation bolstered expectations for coming cuts to interest rates.