Wall Street closed mixed on Wednesday, pulled up by tech and utilities stocks. Two of the market’s main indexes hit new highs after producer prices posted an unexpected decline, further boosting hopes of a Fed rate cut next week to support the economy. While two of the three benchmark indexes closed in the green, one finished in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.5%, or 220.42 points, to close at 45,490.92. Twenty-one components of the 30-stock index ended in negative territory, while nine ended in positive.
The tech-heavy Nasdaq Composite added 6.57 points, or less than 0.1%, to close at 21,886.06.
The S&P 500 gained 19.43 points, or 0.3%, to close at 6,532.04. Five of the 11 broad sectors of the benchmark index closed in the green. The Technology Select Sector SPDR (XLK), the Energy Select Sector SPDR (XLE) and the Utilities Select Sector SPDR (XLU) advanced 1.8%, 1.8% and 1.7%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) declined 1.2%.
The fear gauge CBOE Volatility Index (VIX) increased 2.1% to 15.35. A total of 17.2 billion shares were traded on Wednesday, lower than the last 20-session average of 16 billion.
Producer Price Drop Strengthens Fed Rate Cut Hopes
Stocks rallied on Wednesday after the Producer Price Index (PPI) showed an unexpected decline, reinforcing optimism that inflationary pressures are easing and strengthening the case for a Fed rate cut as early as next week. PPI for August fell 0.1% against a consensus of a 0.3% rise, while the number for July was revised down to an increase of 0.7% from the previously reported 0.9%. Core PPI increased 0.3% after rising 0.4% in July. The softer wholesale price data suggested that cost pressures in the supply chain are cooling, which could translate into reduced inflationary risks for consumers and businesses. Investors welcomed this development, as it increases the likelihood of monetary policy easing to support economic growth.
The PPI reading provided fresh momentum to equities, helping two of the major U.S. benchmark indexes notch new record highs. Traders interpreted the data as a clear signal that the Fed will have more room to lower borrowing costs without stoking inflation, which in turn lifted confidence across rate-sensitive sectors. At the same time, Treasury yields edged lower in response to the weaker inflation print, further supporting equity valuations.
Market sentiment had been somewhat cautious in the days leading up to the report, with investors balancing concerns about a slowing labor market against uncertainty over the Fed’s next move. The surprising fall in wholesale prices shifted the narrative toward optimism, prompting a broad-based rally. Focus now shifts squarely onto Thursday’s Consumer Price numbers.
Oracle Surge Lifts AI Stocks and the Broader Tech Sector
On Tuesday, Oracle Corporation ORCL reported first-quarter fiscal 2026 earnings after the market closed. ORCL met the Zacks Consensus Estimate earnings of $1.47 per share and its stock soared 36%, sending ripples across the broader market. The company unveiled blockbuster AI-cloud contracts, including a landmark deal with OpenAI, and reported a sharp increase in future revenue commitments. Investors interpreted the results as evidence that Oracle is rapidly transforming into a key player in the AI infrastructure boom, rivaling established cloud leaders.
This surge in Oracle’s valuation also spilled over into semiconductor and AI-related stocks, as traders bet on accelerating demand for chips, servers and cloud infrastructure to support Oracle’s growth. Combined with easing inflation signals from the PPI report, Oracle’s surprise strength amplified bullish sentiment across equities, reinforcing hopes that rate cuts from the Fed would further support growth in the technology sector.
Consequently, shares of Broadcom Inc. AVGO and NVIDIA Corporation NVDA jumped 9.8% and 3.9%, respectively. AVGO currently carries a Zacks Rank #3 (Hold), while NVDA has a #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Per a government report, for the week ending Sept. 5, 2025, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.9 million barrels from the previous week.
Per the U.S. Census Bureau, wholesale inventories for July increased 0.1%, after rising 0.2% in June. The number for June was revised up from the previously reported 0.1%.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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