Oracle Soars 15% on Surprise Earnings
Wholesale PPI Rises Just 0.1% in May
Continuing Jobless Claims Hit 3.5-Year High
Tariff Uncertainty Remains... Trump: "Letters to Be Sent to Each Country Within Two Weeks"
All three major indices on the New York Stock Exchange rose on June 12 (local time). Large-cap technology stocks, led by Oracle, are driving the market upward. While inflation concerns have eased, economic indicators remain mixed, with signs of a cooling labor market.
As of 12:40 p.m. on the same day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average (Dow) was up 47.64 points (0.11%) from the previous trading day, standing at 42,913.41. The large-cap S&P 500 Index rose 19.45 points (0.32%) to 6,041.69, while the tech-heavy Nasdaq Index gained 61.43 points (0.31%) to 19,677.31.
By stock, Oracle surged by 14.68%. The previous day, the company reported better-than-expected results for the fourth quarter of fiscal year 2025 (March 2025 to May 2025) and projected further expansion in cloud growth. Safra Catz, Oracle's CEO, said during a conference call that due to rising demand for artificial intelligence (AI), cloud infrastructure revenue for fiscal year 2026 is expected to increase by more than 70%. This would significantly exceed the previous quarter's growth rate of 52%. Nvidia is up 1.17%, and Microsoft (MS) is up 1.32%. Boeing, the American aircraft manufacturer, is down 4.27% following news of an Air India passenger plane crash. The crashed aircraft was a Boeing 787 Dreamliner.
Inflation and employment indicators were mixed. According to the U.S. Department of Labor, the Producer Price Index (PPI) for the previous month rose just 0.1% from the month before. Although this marked a turnaround from April (when it fell by 0.2%), it was below the market expectation of a 0.2% increase. The PPI, often referred to as wholesale inflation, has shown a slowing trend for four consecutive months. Both goods and services prices rose only slightly, indicating that the impact of President Donald Trump's tariffs has been limited. The Consumer Price Index (CPI) for May, released the previous day, also rose 2.4% year-on-year, falling short of the expected 2.5% increase.
While inflationary pressures have eased, signs of a cooling labor market are emerging. According to the U.S. Department of Labor, the number of continuing claims for unemployment benefits?those claiming for at least two weeks?came to 1,956,000 for the week of May 25?31. This is the highest level in three and a half years since November 2021. The figure exceeded both the revised number from the previous week (1,902,000) and the market expectation (1,910,000). This suggests that it is taking longer for the unemployed to find new jobs. Initial jobless claims for the week of June 1?7 totaled 248,000, matching the previous week's level and surpassing the forecast of 242,000.
The market is closely watching the official results of the U.S.-China trade talks held in London on June 9?10, along with future tariff policy developments. The previous day, President Trump said that it was "probably unnecessary" to extend the mutual tariff suspension set to expire on July 8, adding, "At a certain point, I will send a letter to our trading partners." He continued, "We are negotiating with Japan, Korea, and many other countries," and explained, "Within a week and a half or two weeks, I will send letters to each country outlining the terms of the agreements, as I did with the European Union (EU)."
President Trump also announced the previous day that the U.S.-China trade negotiations had been completed. China agreed to resume rare earth supplies to the U.S., and the U.S. agreed to ease restrictions on Chinese students entering American universities. However, the leaders of both countries have not yet given final approval to these agreements.
Tom Hainlin, senior investment strategist at US Bank Asset Management Group, analyzed, "We are still in a baseline scenario of uncertainty regarding the progress of trade negotiations," adding, "The market is showing volatility across a wide range, but it is difficult to find sustained breakthroughs until a conclusion is reached."
Government bond yields are declining. The yield on the U.S. 10-year Treasury note, the global benchmark for bond yields, fell 4 basis points (1bp=0.01 percentage point) from the previous day to 4.36%, while the yield on the 2-year Treasury note, which is sensitive to monetary policy, dropped 4 basis points to 3.9%.
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