The S&P 500 and Nasdaq have notched record-high closes as Oracle surged and cooler-than-expected inflation data supported expectations the US Federal Reserve will cut interest rates next week.
Oracle soared 36 per cent in its biggest one-day percentage gain since 1992 after the tech company pointed to a demand surge from AI firms for its cloud services.
Its stock market value reached $US922 billion ($A1.4 trillion), leapfrogging the values of Eli Lilly, JPMorgan Chase and Walmart, and approaching Tesla's $US1.12 trillion market value.
Artificial intelligence-related chip stocks also rallied, with Nvidia up 3.8 per cent, Broadcom jumping 10 per cent and Advanced Micro Devices climbing 2.4 per cent.
The PHLX chip index rose 2.3 per cent to a record high.
Data centre power suppliers also benefited, with Constellation Energy, Vistra and GE Vernova all rising more than 6.0 per cent.
Apple, viewed by many investors as lagging in the race to dominate AI, declined 3.2 per cent, sliding for a fourth straight session.
A cooler-than-expected producer prices reading provided additional momentum as traders shored up their bets on interest-rate cuts this year.
Recent labour market data has confirmed the US jobs market is in a slowdown.
Traders fully expect the Fed to cut interest rates by at least 25 basis points at its policy meeting next week, with a 10 per cent chance the central bank could cut by 50 basis points, CME's FedWatch tool showed.
The S&P 500 has now climbed about 11 per cent in 2025 while the Nasdaq has rallied about 13 per cent.
"The fundamentals remain very strong in the equity markets, domestically. But we also have to acknowledge that valuations are extended at this point and serve as some natural tension to a continued upward trajectory," said Bill Northey, senior investment director at US Bank Wealth Management in Billings, Montana.
The S&P 500 climbed 0.30 per cent to end the session at 6,532.04 points, closing with a record high for the second straight day, the Nasdaq gained 0.03 per cent to 21,886.06 points for its third consecutive record-high close and the Dow Jones Industrial Average declined 0.48 per cent to 45,490.92 points.
Six of the 11 S&P 500 sector indexes declined, led lower by consumer discretionary, down 1.58 per cent, followed by a 1.06 per cent loss in consumer staples.
Investors will now focus on consumer prices data due on Thursday, for insights on where US inflation is headed.
"Combining the softer data (PPI figures) with the Fed's increased emphasis on the labour market side and the growing trend we've seen in downward revisions to the monthly employment data - all support the expectation for a rate cut," said Jordan Rizzuto, CIO at GammaRoad Capital Partners.
In a setback for the White House, a federal judge on Tuesday temporarily blocked US President Donald Trump from removing Fed Governor Lisa Cook.
Barclays and Deutsche Bank raised their year-end targets for the S&P 500, citing stronger corporate earnings, resilient US economic growth and optimism around artificial intelligence.
Synopsys tumbled 36 per cent in its biggest one-day decline on record after the chip design software provider missed Wall Street estimates for quarterly revenue.
Rival Cadence Design Systems fell 6.4 per cent.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.5-to-one ratio.
The S&P 500 posted 19 new highs and 8 new lows; the Nasdaq recorded 112 new highs and 72 new lows.
Volume on US exchanges was relatively heavy, with 17.2 billion shares traded, compared with an average of 16.0 billion shares over the previous 20 sessions.
