The consumer price index (CPI) for August showed a 0.4% increase month-over-month and a 3.4% rise year-over-year, aligning with analysts' expectations. Core CPI, which excludes food and energy, rose 0.3%, slightly above forecasts.
This inflation data is critical as it precedes the Federal Reserve's upcoming rate decision, with traders now assigning over a 70% probability to a quarter-point rate hike. Additionally, U.S. crude oil prices surged past $100 per barrel, contributing to inflationary pressures.
In corporate news, Oracle's shares rose 7% after reporting a nearly 30% increase in overall revenue to $19.35 billion, driven by a 62% jump in cloud revenue to $11.61 billion. However, Oracle's significant capital expenditures of $28.5 billion and a negative free cash flow of $5.4 billion raise concerns about its financial health amidst its aggressive expansion strategy.
Meanwhile, Trump's proposal to provide $5,000 dividends to U.S. citizens if Republicans retain control of Congress has sparked debate over its feasibility and legality, costing over $1.2 trillion.
Lastly, OpenAI's launch of ChatGPT for Financial Services, developed with Morgan Stanley and Evercore, could disrupt traditional roles in investment banking by automating research and analysis tasks, raising questions about the future training of junior bankers