Stocks closed mixed yesterday, but the S&P 500 and the Nasdaq both eked out another new all-time high close.

Tuesday's after-the-bell earnings from Oracle helped lift the indexes, and added more fuel to the AI trade.

While Oracle met expectations on earnings, and posted a negative sales surprise of -0.58%, their quarterly EPS growth came in at 5.75% vs. this time last year, with a sales growth of 12.2%. But it was Oracle's soaring outlook for their AI offerings over the next 4 years ($18 billion in fiscal 2026, then growing to $32B in 2027, $73B in 2028, $114B in 2029, and $144B in 2030), that sent the stock up 36% yesterday ? their best one-day advance since 1992. And making founder Larry Ellison the richest person in the world in the process.

Analysts were "blown away" and "in shock" at the forecast. And a Wells Fargo analyst called it a "momentous confirmation" of the AI trade.

People were in awe a couple of years ago when NVIDIA gave skyrocketing forecasts, and then delivered on them and more. The market cheered the news from Oracle (they have been for the last couple of years actually) as investors poured more money into the stock. Oracle was up 44.9% YTD prior to yesterday's move. They are now up 97% YTD. Since 2023, they are up 302%. For context, NVIDIA is up 1,114% since 2023.

In other news, yesterday's Producer Price Index (PPI ? wholesale inflation) came in better-than-expected with a headline number of -0.1% m/m vs. last month's 0.7% and views for 0.3%. The y/y rate eased to 2.6% from last month's 3.3% and expectations for the same. The core rate (ex-food & energy) came in at -0.1% m/m vs. last month's 0.7% and the consensus for 0.3%, while the y/y rate ticked lower to 2.8% vs. last month's 3.7% and forecasts for 3.5%.

The softer inflation reading underscores the narrative the Fed has recently put out saying that risks to the labor market were greater than the risks for inflation. With last week's worse-than-expected employment report, and yesterday's better-than-expected inflation report, it shows the Fed is seeing things correctly. And is likely to finally cut rates next week on 9/17.

MBA Mortgage Applications rose by 9.2% w/w with purchases up 6.6%, and refi's up 12.2%.

And Wholesale Inventories came in at 0.1% m/m vs. last month's 0.2% and estimates for 0.2% as well.

Today we'll get another look at inflation with the Consumer Price Index (CPI ? retail inflation) report. The headline number is expected to show a 0.3% m/m change vs. last month's 0.2% pace, while the y/y rate comes in at 2.9% vs. last month's 2.7%. The core rate is expected at 0.3% m/m, which is in line with last month. And the y/y rate is also expected to mirror last month's as well at 3.1%.

We'll also get Weekly Jobless Claims, and a look at the Fed Balance Sheet.

In spite of the bullish news confirming the thriving AI trade and softer inflation, the market put in a rather tepid performance yesterday. Granted, the S&P is up 11.1% YTD, with the Nasdaq up 13.3%. But it would be nice to see the market build upon the gains we saw over the last two days.

Regardless, I'm expecting plenty more by years end, with the S&P notching another 20%+ gain for 2025.

See you tomorrow,