Animal spirits soar as Wall Street bets on Fed and AI
After months of tense speculation, the US stock market found a new rhythm this week. On Tuesday, the S&P 500 and Nasdaq closed at fresh record highs, powered by AI euphoria and growing optimism that the Federal Reserve is primed for an interest rate cut. But as the sun rises on September 11, traders pause – eyes locked on a looming inflation report that could set the tone for weeks to come.
Clouds gather, but optimism reigns
Walking the trading floor feels different when the market’s narrative shifts. For most of 2025, investors watched mega-cap tech lead, with value and small-caps in their wake. Oracle flipped the script this week, surging 36% after announcing staggering demand for its cloud services – the result of four multi-billion pound AI contracts in a single quarter. Their CEO, Safra Catz, called the quarter “astonishing”, underscoring a transformation where artificial intelligence drives real profit rather than just promise.
“Animal spirits are soaring,” notes Marvin Loh, senior macro strategist at State Street. “Easing inflation pressures, resilient corporate earnings, and expectations for US rate cuts have boosted investor sentiment in a way we haven’t seen for some time”. Oracle’s rally didn’t just nudge the S&P 500 higher, it dragged the whole market into record territory, reminding investors how quickly tech can swing the mood.
Apple didn’t join the victory lap, dropping 3.2% as some analysts fretted its newest iPhone launch lacked the AI sparkle of competitors. The lesson here: don’t underestimate how relentless the market’s focus on innovation has become.
Betting big on the future
What’s driving these record closes? Much of it comes down to what traders think the Federal Reserve will do next. Friday’s disappointing jobs report shifted the odds dramatically. “There’s almost a 92% chance of a 25-point rate cut next week,” Loh explains, citing data from CME Group’s FedWatch tool. Some see a small chance for an even larger cut if Thursday’s CPI data shows further softness.
Andrew Zinin, lead editor covering Oracle, says investors now crave evidence. “The surge will significantly boost Oracle’s footprint among hyperscalers and rapidly expand its cloud revenues. It’s no longer hype, these are hard contracts that will add billions in real sales over the next few years. That’s why we’re seeing momentum shift from old guard tech to new AI players”.
Yet not everyone expects uninterrupted gains. Morgan Stanley’s committee tempers excitement: “Historically, the third year of a bull market often slows. But as long as earnings keep pace, market corrections prove short-lived and favour patient investors”.
New cycle, a new mood
For now, positivity prevails. Fresh contracts and rate cut hopes have swept past September’s usual caution, but investors aren’t getting carried away. They’re watching Thursday’s inflation data, hoping it confirms the narrative: that AI’s real-world boom and a softer Fed might keep the bull market alive for a little longer.
As John Templeton once said, “Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria.” Right now, Wall Street’s optimism feels justified, but the market’s story is never finished.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
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After months of tense speculation, the US stock market found a new rhythm this week. On Tuesday, the S&P 500 and Nasdaq closed at fresh record highs, powered by AI euphoria and growing optimism that the Federal Reserve is primed for an interest rate cut. But as the sun rises on September 11, traders pause – eyes locked on a looming inflation report that could set the tone for weeks to come.
Clouds gather, but optimism reigns
Walking the trading floor feels different when the market’s narrative shifts. For most of 2025, investors watched mega-cap tech lead, with value and small-caps in their wake. Oracle flipped the script this week, surging 36% after announcing staggering demand for its cloud services – the result of four multi-billion pound AI contracts in a single quarter. Their CEO, Safra Catz, called the quarter “astonishing”, underscoring a transformation where artificial intelligence drives real profit rather than just promise.
“Animal spirits are soaring,” notes Marvin Loh, senior macro strategist at State Street. “Easing inflation pressures, resilient corporate earnings, and expectations for US rate cuts have boosted investor sentiment in a way we haven’t seen for some time”. Oracle’s rally didn’t just nudge the S&P 500 higher, it dragged the whole market into record territory, reminding investors how quickly tech can swing the mood.
Apple didn’t join the victory lap, dropping 3.2% as some analysts fretted its newest iPhone launch lacked the AI sparkle of competitors. The lesson here: don’t underestimate how relentless the market’s focus on innovation has become.
Betting big on the future
What’s driving these record closes? Much of it comes down to what traders think the Federal Reserve will do next. Friday’s disappointing jobs report shifted the odds dramatically. “There’s almost a 92% chance of a 25-point rate cut next week,” Loh explains, citing data from CME Group’s FedWatch tool. Some see a small chance for an even larger cut if Thursday’s CPI data shows further softness.
Andrew Zinin, lead editor covering Oracle, says investors now crave evidence. “The surge will significantly boost Oracle’s footprint among hyperscalers and rapidly expand its cloud revenues. It’s no longer hype, these are hard contracts that will add billions in real sales over the next few years. That’s why we’re seeing momentum shift from old guard tech to new AI players”.
Yet not everyone expects uninterrupted gains. Morgan Stanley’s committee tempers excitement: “Historically, the third year of a bull market often slows. But as long as earnings keep pace, market corrections prove short-lived and favour patient investors”.
New cycle, a new mood
For now, positivity prevails. Fresh contracts and rate cut hopes have swept past September’s usual caution, but investors aren’t getting carried away. They’re watching Thursday’s inflation data, hoping it confirms the narrative: that AI’s real-world boom and a softer Fed might keep the bull market alive for a little longer.
As John Templeton once said, “Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria.” Right now, Wall Street’s optimism feels justified, but the market’s story is never finished.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Ready to earn on every trade?
Invest in 11,000+ US stocks & ETFs