The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.30%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.48%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.04%. September E-mini S&P futures (ESU25) rose +0.28%, and September E-mini Nasdaq futures (NQU25) rose +0.02%.
Stock indexes settled mixed on Wednesday, with the S&P 500 posting a new record high and the Nasdaq 100 posting a 4-week high. The broader market garnered support on Wednesday as bond yields fell after US producer prices for August unexpectedly eased, cementing expectations for Fed interest rate cuts. The 10-year T-note yield fell -6 bp to a 5-month low of 4.03%.
The overall market also had support from a +35% surge in Oracle to a record high, leading AI-infrastructure stocks higher after it gave an aggressive outlook for its cloud business, driven by demand for AI infrastructure.
The Dow Jones Industrials was under pressure on Wednesday due to weakness in Apple, which closed down more than -3% on market disappointment in the launch of the latest versions of the iPhone, Apple Watch, and AirPods. Also, Salesforce fell more than -3% to lead software stocks lower after Oracle’s results showed that demand for traditional software remains weak.
The escalation of geopolitical tensions in Europe is a negative for stocks after Poland shot down drones that crossed into its territory during Russia’s latest air strike on Ukraine, calling it an “act of aggression.”
Signs of ongoing deflation in China are negative for China’s economy and global growth prospects. China’s Aug CPI fell -0.4% y/y, weaker than expectations of -0.2% y/y and the steepest decline in 6 months. Also, China’s Aug PPI fell -2.9% y/y, right on expectations, and the thirty-fifth consecutive month that producer prices have declined on a year-on-year basis.
US MBA mortgage applications rose +9.2% in the week ended September 5, with the purchase mortgage sub-index up +6.6% and the refinancing sub-index up +12.2%. The average 30-year fixed rate mortgage fell -15 bp to an 11-month low of 6.49% from 6.64% in the prior week.
The US Aug final-demand PPI eased to +2.6% y/y from +3.1% y/y in July, a smaller increase than expectations of +3.3% y/y. Aug PPI ex-food and energy eased to +2.8% y/y from +3.4% y/y in July, a smaller increase than expectations of +3.5% y/y.
Market focus this week will be on any trade or tariff news. On Thursday, the US Aug CPI is expected to climb to +2.9% y/y from +2.7% y/y in July, and Aug CPI ex-food and energy is expected to increase +3.1% y/y, unchanged from July’s +3.1%. Also, weekly initial unemployment claims are expected to fall by -2,000 to 235,000. On Friday, the University of Michigan’s Sep US consumer sentiment index is expected to slip -0.2 to 58.0.
The markets are now pricing in a 100% chance of a -25 bp rate cut and a 10% chance of a -50 bp rate cut at the upcoming FOMC meeting on Sep 16-17. After the fully expected -25 bp rate cut at the Sep 16-17 meeting, the markets are discounting a 78% chance of a second -25 bp rate cut at the Oct 28-29 meeting. The markets are now pricing in an overall -73 bp rate cut in the federal funds rate by year-end to 3.65% from the current 4.38% rate.
Overseas stock markets on Wednesday settled mixed. The Euro Stoxx 50 fell from a 1.5-week high and closed down -0.14%. China’s Shanghai Composite closed up +0.13%. Japan’s Nikkei Stock 225 closed up +0.87%.
Interest Rates
December 10-year T-notes (ZNZ5) on Wednesday closed up by +7.5 ticks. The 10-year T-note yield fell by -5.6 bp to 4.032%. T-notes erased early losses and moved higher Wednesday after US Aug producer prices eased more than expected, a dovish factor for Fed policy and cementing expectations for at least a 25 bp rate cut at next week’s FOMC meeting. T-notes added to their gains Wednesday afternoon on strong demand for the Treasury’s $39 billion auction of 10-year T-notes, which had a bid-to-cover ratio of 22.65, above the 10-auction average of 2.56.
Wednesday’s rally in the S&P 500 to a new all-time high limited gains in T-note prices. Also, supply pressures are weighing on T-notes as the Treasury auctions $119 billion of T-notes and T-bonds this week.
Concerns about Fed independence are negatively impacting T-note prices due to President Trump’s attempt to fire Fed Governor Cook and Stephen Miran’s intention to hold a Fed Governor position while remaining technically in his White House role on the Council of Economic Advisors.
European government bond yields on Wednesday were mixed. The 10-year German bund yield fell to a 1-month low of 2.631% and finished down -0.8 bp to 2.652%. The 10-year UK gilt yield rose +1.0 bp to 4.633%.
Swaps are discounting no chance for a -25 bp rate cut by the ECB at Thursday’s policy meeting.
US Stock Movers
Oracle (ORCL) closed up more than +35% to lead gainers in the S&P 500 after giving a robust forecast for its cloud-infrastructure business, a sign of strong AI-related demand. After fiscal year 2026, the company sees cloud infrastructure revenue in the subsequent four years of $32 billion, $73 billion, $114 billion, and $114 billion.
Stocks tied to AI computing infrastructure are rallying after Oracle forecasted faster-than-expected revenue growth in its cloud infrastructure unit. CoreWeave (CRWV) closed up more than +17% and Broadcom (AVGO) closed up more than +9% to lead gainers in the Nasdaq 100. Also, Arista Networks (ANET) closed up more than +6%, and Nvidia (NVDA) closed up more than +3% to lead gainers in the Dow Jones industrials. In addition, Super Micro Computer (SMCI) and Advanced Micro Devices (AMD) closed up more than +3%.
Today’s rally in AI-infrastructure stocks is also boosting power-producing stocks, as the increase in AI usage will require more power. Vertiv Holdings (VRT) closed up more than +9%, and Vistra Corp (VST) closed up more than +8%. Also, Constellation Energy (CEG) and GE Vernova (GEV) closed up more than +6%, and Talen Energy (TLN) closed up more than +3%.
Travere Therapeutics (TVTX) closed up more than +26% after the FDA informed the company that an advisory committee is no longer needed for its supplemental drug application for the treatment of a rare kidney disorder.
Bill Holdings (BILL) closed up more than +4% after the Financial Times reported that Elliot Management has built a large stake in the company.
GameStop (GME) closed up more than +3% after reporting Q2 hardware and accessories net sales of $592.1 million, well above the consensus of $434.8 million.
Johnson Controls International Plc (JCI) closed up more than +1% after raising its quarterly cash dividend to 40 cents per share, above expectations of 37 cents per share.
Synopsys (SNPS) closed down more than -35% to lead losers in the S&P 500 and Nasdaq 100 after forecasting full-year adjusted EPS of $12.76-$12.80, well below the consensus of $15.11.
Chewy (CHWY) closed down more than -16% despite reporting better-than-expected Q2 results, with analysts citing disappointment that the results weren’t even better.
Hospital operators retreated Wednesday, led by a -9% plunge in Arcadi Healthcare (ACHC) after the stock was downgraded to neutral from buy at Bank of America Global Research. Also, HCA Healthcare (HCA) closed down more than -4%, and Tenet Healthcare (THC) and Community Health Systems (CYH) closed down more than -2%.
Trade Desk Inc (TTD) closed down more than -11% after Morgan Stanley downgraded the stock to equal weight from overweight.
Salesforce (CRM) closed down more than -3% to lead losers in the Dow Jones Industrials after Oracle’s results showed that demand for traditional software remains weak.
Apple (AAPL) closed down more than -3% on market disappointment in the launch of the latest versions of the iPhone, Apple Watch, and AirPods.
HP Inc (HPQ) closed down more than -2% after Evercore ISI downgraded the stock to in line from outperform.
Earnings Reports(9/11/2025)
Adobe Inc (ADBE), Frequency Electronics Inc (FEIM), IBEX Holdings Ltd (IBEX), KalVista Pharmaceuticals Inc (KALV), Kestra Medical Technologies Ltd (KMTS), Kroger Co/The (KR), Lovesac Co/The (LOVE), RH (RH).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
