Market surge on Fed cut and US-China trade optimism<\/p>\n
Fresh record highs for the three key United States (US) equity<\/a> markets on Friday were supported by the Federal Reserve’s (Fed)<\/a> rate cut, expectations of further reductions, and signs of progress in US-China relations. For the week, the Nasdaq 100<\/a>\u00a0gained 2.22%, the S&P 500<\/a> added 1.22%, and the\u00a0Dow Jones<\/a> climbed by 481 points (+1.05%).<\/p>\n The S&P 500 initially weakened on Friday as Chinese media reported restrictive trade measures after a call between President Trump and President Xi Jinping. However, equities rebounded after President Trump announced a meeting with Chinese President Xi at the upcoming Asia-Pacific Economic Cooperation (APEC) Summit in South Korea on 31 October, ahead of the new 10 November deadline for tariffs.<\/p>\n Oracle and Meta’s potential AI cloud deal boosts the rally<\/p>\n The rally<\/a> gained momentum on speculative reports that Oracle<\/a> and Meta<\/a> are considering a deal on artificial intelligence (AI) cloud computing valued at approximately $20 billion. The agreement would provide Meta with expanded access to Oracle’s AI-optimised cloud infrastructure, including hardware for AI model training and inference.<\/p>\n This aligns with Meta’s intention to invest in a massive data centre expansion to support its platforms like Facebook, Instagram, and LLaMA AI models. Shares<\/a> of Oracle surged 4.1% to close at $308.66, adding to its 80%+ year-to-date gains.<\/p>\n The key event on this week\u2019s economic calendar is the Fed’s preferred measure of inflation<\/a>, the core personal consumption expenditures (PCE) price index for August.<\/p>\n Core PCE inflation<\/p>\n Date: Friday, 26 September at 10.30pm AEST<\/b><\/p>\n For July, the headline PCE price index increased by 0.2% month-on-month (MoM), easing from 0.3% in June. This saw the annual rate of headline PCE inflation remain at 2.6% in July, in line with expectations.<\/p>\n The core PCE index, the Fed’s preferred measure of inflation, rose by 0.3% MoM, the same as in June. This increased the annual rate of core PCE inflation to 2.9% from 2.8%, marking the highest in five months.<\/p>\n