Dow, Nasdaq up 0.24%, S&P gains 0.38% on rate cut expectation

U.S. stocks gained on Thursday as investors weighed soft inflation data and growing expectations of a Federal Reserve rate cut, with strong tech earnings helping offset trade uncertainty and sector-specific losses.

The S&P 500 rose 0.38% to close at 6,045.26, led by a rally in large-cap tech stocks. The benchmark index now sits less than 2% below its all-time high. The Nasdaq Composite added 0.24%, while the Dow Jones Industrial Average climbed 101.85 points, or 0.24%, to 42,967.62.

Oracle was the day’s standout performer, surging 13% after reporting better-than-expected quarterly results and projecting over 70% growth in cloud infrastructure revenue next year, fueled by rising AI demand. 

The strong report lifted the broader tech sector and helped drive market gains.

The rally came despite a 4.8% drop in Boeing shares, which weighed on the Dow after one of its 787 Dreamliners crashed in India. Still, investor sentiment held up amid easing Treasury yields and softer economic data that pointed to potential Fed policy easing.

Rate cut expectations increasing

Expectations for a rate cut later this year have grown as investors interpret the weaker inflation and labor data as giving the Fed more room to ease without stoking price pressures.

The May producer price index rose just 0.1%, below expectations, while jobless claims showed signs of labor market softening. The data, combined with strong demand at a Treasury auction, sent yields lower, with the 10-year note dipping below 4.4%.

Trade tensions remained in focus as President Trump reiterated plans to send tariff warning letters to dozens of countries, though he signaled progress with China and other key partners. Despite ongoing uncertainty, investors appear cautiously optimistic.