Stock Market Today: S&P 500 Nabs New Record Close After February CPI

Stocks were lower in early trading Tuesday as investors mulled over the February Consumer Price Index (CPI) report. However, a big rally in several mega-cap tech names helped the main indexes find their footing.  

Ahead of the open, the Bureau of Labor Statistics said headline CPI was up 0.4% from January to February and 3.2% higher year-over-year. Both figures were higher than the month prior and the annual increase was more than economists expected.

Core CPI, which excludes volatile food and energy prices, was up 0.4% month-over-month and 3.8% year-over-year, both slightly above economists' forecasts.

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"Although inflation has continued to ease, much of core inflation remains 'sticky' and isn't unwinding at a pace that would offer the Fed the confidence it needs to begin the easing cycle perhaps even in June," says Quincy Krosby, chief global strategist for LPL Financial. 

While today's data indicates "the last mile towards 2% has become a bit longer," Krosby adds, it also gives hope that the Fed should be comfortable enough to start cutting rates by June or July.

Fed Chair Jerome Powell will likely reiterate the central bank's "data-dependent" approach to interest rates at the next Fed meeting, which kicks off one week from today. Wall Street will be keen for clues to the Fed's rate-cut plans. 

According to CME Group's FedWatch Tool, futures traders are currently pricing in a 59% chance the Fed will issue its first quarter-point rate cut in June. Expectations it will come in July are at 46%, up from 40% a day ago.  

Oracle pops on strong cloud growth

In single-stock news, Oracle (ORCL) surged 11.8% after the software firm reported higher-than-expected fiscal third-quarter earnings of $1.41 per share on in-line revenue of $13.3 billion. Revenue in the company's cloud services and license support segment, which houses its artificial intelligence (AI) servers, was up 12% year-over-year.

William Blair analyst Sebastien Naji upgraded the tech stock to Outperform (Buy) after earnings, citing robust demand for the company's cloud offerings, including Oracle Cloud Infrastructure, and a "massive tailwind" from generative AI that's still in its early innings.

"In our view, the positive demand commentary and strong bookings growth undergird the structural shift at Oracle that positions the company well for a sustained acceleration in top-line growth," Naji says.

Nvidia gains $154 billion in market value after Oracle earnings

Nvidia (NVDA) was another notable gainer Tuesday, with the Magnificent 7 stock surging 7.2% – adding $154 billion in market cap along the way. The chipmaker appears to have gotten a boost from Oracle's earnings report. 

In the company's earnings call, Larry Ellison, Oracle's chief technology officer, said it inked a big cloud infrastructure contract with Nvidia in its fiscal Q3. "Oracle's Generation 2 AI infrastructure business is booming," Ellison said. "That's become pretty clear to everybody."

Additionally, Oracle CEO Safra Catz hinted at "some very nice joint announcements with Nvidia" coming out next week.

Still, market participants may have just been buying the dip on one of Wall Street's hottest stocks, considering NVDA shares suffered a two-day loss of 6.1% heading into today's trading. 

As for the main indexes, the Nasdaq Composite surged 1.5% to 16,265, the S&P 500 rose 1.1% to 5,175, and the Dow Jones Industrial Average gained 0.6% to 39,005.

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