US STOCKS-Wall St indexes hit records as Oracle soars on AI optimism

By Noel Randewich and Ragini Mathur

Sept 10 (Reuters) - The S&P 500 and the Nasdaq hit intraday record highs on Wednesday, lifted by a surge in Oracle, while cooler-than-expected inflation data supported expectations the U.S. Federal Reserve will cut interest rates next week.

Oracle ORCL.N soared 38% and was set for its biggest one-day percentage gain since 1992 after the tech company pointed to a demand surge from AI firms for its cloud services.

Its stock market value reached $938 billion, leapfrogging the values of Eli Lilly LLY.N, JPMorgan Chase JPM.N and Walmart WMT.N, and approaching Tesla's TSLA.O $1.14 trillion market value.

AI-related chip stocks also rallied, with Nvidia NVDA.O up 4.3%, Broadcom AVGO.O jumping over 8% and Advanced Micro Devices AMD.O climbing 3.4%. The PHLX chip index .SOX rose 2.3% and hit a record high.

Data center power suppliers also benefited, with Constellation Energy CEG.O and Vistra VST.N both advancing about 9%, and GE Vernova GEV.N rising 6.2%.

A cooler-than-expected producer prices reading provided additional momentum as traders shored up their bets on interest-rate cuts this year.

Recent labor market data has confirmed the U.S. jobs market is in a slowdown.

Traders fully expect the Fed to cut interest rates by at least 25 basis points at its policy meeting next week, with a 10% chance the central bank could cut by 50 basis points, CME's FedWatch tool showed.

The S&P 500 has now climbed 11% in 2025, while the Nasdaq has rallied 13%.

"The fundamentals remain very strong in the equity markets, domestically. But we also have to acknowledge that valuations are extended at this point and serve as some natural tension to a continued upward trajectory," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Billings, Montana.

The S&P 500 was last up 0.28% at 6,530.99 points.

The Nasdaq gained 0.11% to 21,903.48 points, while the Dow Jones Industrial Average was down 0.59% at 45,439.43 points.

Six of the 11 S&P 500 sector indexes declined, led lower by consumer discretionary .SPLRCD, down 1.31%, followed by a 1.28% loss in healthcare .SPXHC. The S&P 500 tech index .SPLRCT rose 1.7%.

Investors will now focus on consumer prices data due on Thursday, for insights on where U.S. inflation is headed.

"Combining the softer data (PPI figures) with the Fed's increased emphasis on the labor market side and the growing trend we've seen in downward revisions to the monthly employment data - all support the expectation for a rate cut," said Jordan Rizzuto, CIO at GammaRoad Capital Partners.

In a setback for the White House, a federal judge on Tuesday temporarily blocked U.S. President Donald Trump from removing Fed Governor Lisa Cook.

Barclays and Deutsche Bank raised their year-end targets for the S&P 500, citing stronger corporate earnings, resilient U.S. economic growth and optimism around artificial intelligence.

Synopsys SNPS.O slid 35% and was set for its biggest one-day decline on record after the chip design software provider missed Wall Street estimates for quarterly revenue. Rival Cadence Design Systems CDNS.O fell 8%.

Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX by a 1.9-to-one ratio.

The S&P 500 posted 19 new highs and 7 new lows; the Nasdaq recorded 102 new highs and 54 new lows.