PPI Data Reinforces Rate-Cut Expectations; U.S. Treasuries, Crude Oil, and LME Copper Hit Fresh High

Market Overview

U.S. producer price index (PPI) data released yesterday further strengthened market expectations for rate cuts, fueling broad gains across risk assets and bonds.

Equities delivered a mixed performance. Supported by large-cap tech, the S&P 500 and Nasdaq notched their third consecutive daily advance and hit fresh record highs, while the Dow Jones Industrial Average edged slightly lower. Oracle surged 36% on robust earnings—the stocks biggest single-day jump since 1992—which ignited a rally in AI chipmakers, with Broadcom soaring nearly 10% and NVIDIA advancing close to 4%.

Treasuries rallied on the back of rate-cut bets, with the 10-year yield falling to a five-month low after a strong auction. The U.S. dollar index turned lower following the PPI release, hovering near a two-month trough. Offshore yuan extended its strength, approaching a ten-month high. Commodities rose across the board: crude oil posted a three-day winning streak to a one-week high, gold reversed intraday losses to settle near record levels, and London copper broke above $10,000 per metric ton for the first time in two months.

Hot Topics Preview

● Oracle Stock Soars

OpenAI has signed a contract to purchase $300 billion worth of computing capacity from Oracle over the next five years. The agreement, set to begin in 2027, requires 4.5GW of power—equivalent to the output of two Hoover Dams—enough to supply roughly 4 million households. Oracle shares closed up nearly 36%, marking the largest one-day gain since 1992, briefly pushing its market capitalization above $950 billion. According to the Bloomberg Billionaires Index, Oracle founder Larry Ellison has surpassed Elon Musk to become the worlds richest individual for the first time.

● U.S. August PPI -0.1% MoM

U.S. producer prices unexpectedly declined in August, providing fresh support for the Federal Reserve‘s anticipated rate cut next week. The PPI fell into negative territory for the first time in four months, reflecting corporate restraint on pricing pressures despite higher tariff-related costs. Following the release, President Trump posted on social media: “No inflation! ’Mr. Too Late must cut rates sharply and immediately.”

Key Events to Watch

• 20:15 (GMT+8) – European Central Bank Interest Rate Decision

• 20:30 (GMT+8) – U.S. August CPI (YoY & MoM), Core CPI (YoY & MoM), Weekly Initial Jobless Claims