Support
PPI slows, Fed cut odds rise; gold up
U.S. producer prices undershot expectations, reinforcing signals of cooling demand amid increasingly fragile labor data. Rate-cut odds for September rose, 2-year yields eased, the dollar was mixed, and gold hovered near record highs.
Producer price data slowed, increasing pressure on the Fed to lower interest rates.
Gold traded near record highs on Fed-cut expectations and steady investment demand.
Oracle jumped 36% after unveiling deals with OpenAI and major tech leaders; cloud momentum continues.
China reported deflationary price indicators alongside weaker exports and imports.
PPI below expectations; markets stabilize
The U.S. Producer Price Index (PPI) surprised to the downside at −0.1% m/m versus +0.3% expected (prior +0.7%). Year over year, PPI slowed to 2.6% from 3.1%. The report showed softer services prices and firmer goods prices. Tighter trade margins point to some cost absorption by firms, consistent with a demand backdrop that is starting to cool alongside a weakening labor market.
Following the release, CME FedWatch probabilities for a September rate cut increased. 2-year Treasury yields edged lower, while the U.S. Dollar Index was mixed, holding support near 97.
Gold near records on rising cut odds
Gold traded close to all-time highs, supported by the softer PPI print and rising expectations of a Fed cut. Analysts continue to cite steady investment flows, central-bank buying, and a softer dollar as pillars of the rally. With cuts largely priced, the question is now how aggressive the Fed will be. Political pressure from the administration for faster easing has also intensified amid softer macro prints.
Oracle surges on AI cloud demand and partnerships
Oracle led U.S. gains after highlighting strength in its AI-related cloud business. Shares rallied ~36% to a new all-time high. While revenue and EPS did not top consensus, management outlined plans to integrate Oracle infrastructure with Amazon, Google, and Microsoft, improving growth expectations. Oracle also announced a $300 billion multi-year agreement with OpenAI for compute capacity and cloud services—one of the industry’s largest capacity commitments—lifting sentiment across semiconductors and data-center hardware.
China: Consumer deflation, softer trade
China’s CPI fell 0.4% y/y in August, a larger-than-expected decline driven by food prices, while PPI slowed to −2.9% y/y. Reuters noted household caution and ongoing real-estate stress as key drags, though core CPI (ex-food and energy) rose 0.9%, the highest in two years. Authorities signaled continued easing and interest subsidies to support demand.
Recent trade figures showed exports +4.4% y/y and imports +1.3% y/y, both below expectations—suggesting U.S. tariffs may be weighing on flows despite China’s broad consumption base.
