Oracle shares surged last week after the company reported better-than-expected earnings and projected robust growth in its cloud infrastructure revenue. CEO Safra Catz attributed the strong performance to increased demand for AI, indicating that cloud infrastructure revenue is expected to grow by more than 70% for the 2026 fiscal year, a significant jump from the 52% growth observed this quarter. The tech sector was bolstered by Oracle’s rally, lifting the S&P 500 by 0.38% to close at 6,045.26, now less than 2% off its all-time high.
The Nasdaq Composite gained 0.24%, ending the day at 19,662.48, while the Dow Jones Industrial Average added 101.85 points, or 0.24%, settling at 42,967.62. Investor Nancy Tengler expressed optimism about Oracle’s prospects, citing the company’s focus on cloud computing and health tech, including its acquisition of Cerner for $28.3 billion. Tengler noted Oracle’s annual dividend growth and suggested that holding shares in the near term could be beneficial for investors.
Apart from Oracle, Novo Nordisk shares rose over 2% on news of its late-stage trials for a next-generation obesity drug, amycretin. This experimental drug, developed as both a pill and an injection, aims to mimic the gut hormone GLP-1 and the hunger-suppressing pancreatic hormone amylin. Economic data also contributed to positive market sentiment.
The May Producer Price Index, a measure of final demand prices in the U.S. economy, rose just 0.1% following a 0.2% decrease in April, suggesting stabilized inflation.
Oracle shares fuel tech sector rally
Bond yields eased following the report.
However, concerns persist over trade policy, particularly between the United States and China. President Donald Trump indicated he might extend the July 8 deadline for trade talks, although he expressed doubt that extensions would be necessary. Recent discussions between U.S. and Chinese officials in London have yet to yield a definitive deal.
Tom Hainlin, senior investment strategist at U.S. Bank Asset Management Group, remarked that uncertainty around trade negotiations continues to make market direction ambiguous, preventing a clear breakout to new highs. BCA Research warned that even if current U.S.-China trade tariffs are de-escalated, it might not significantly drive stocks higher. The market reaction to recent trade developments has been muted, indicating that investors already expect strong margins and favorable economic conditions.
Goldman Sachs economists have slightly lowered the risk of the U.S. entering a recession in the next year to 30% from 35%, based on recent data showing lesser impacts of tariffs on the economy than previously predicted. They forecast U.S. GDP growth at 1.25% for 2025, up from an earlier estimate of 1.0%. The firm also projects one interest rate cut in December 2025 and two more in 2026.
Lastly, Dan Niles, founder of Niles Investment Management, warned of a potential market downturn later this year, as companies may face slower demand amid ongoing tariff effects.
