Hello traders,
Wednesday morning opened with a jolt of momentum for futures traders as Oracle’s blowout contract pipeline sent E-mini S&P 500 futures climbing toward fresh highs. ES is now only a few points shy of its 52-week peak at 6,541.75. The spark? A 27 percent after-hours surge in Oracle stock, fueled not by earnings strength but by a staggering $455 billion backlog in AI-driven infrastructure contracts.
This is a textbook case of futures traders reading beyond the headline miss on earnings and revenue. Oracle’s CEO projected cloud infrastructure growth of 77 percent this year, with demand from AI players like OpenAI already locking in multi-billion-dollar contracts.
For traders, this validates the long-running thesis that AI spending is still in its infancy.
That kind of secular growth can shift flows across the entire tech sector, making Nasdaq futures and ES both beneficiaries.
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But Oracle isn’t the only story.
GameStop surprised with a 22 percent revenue jump, led by a 63 percent surge in its collectibles segment.
While not directly tied to institutional flows, consumer resilience here reinforces the discretionary strength that tends to thrive when rate cuts are on deck. Together, these earnings prints support a narrative of AI momentum and consumer durability, two powerful themes for equity index futures.
On the macro side, Wednesday’s hotter Producer Price Index (+0.7 percent month over month) would normally be a red flag for rate-sensitive markets.
Yet futures barely blinked, because the market’s focus is squarely on the Fed’s September 17 meeting. An 87 percent chance of a quarter-point cut is already priced in. Traders know Thursday’s CPI is the make-or-break print. If headline inflation holds near 2.9 percent year-over-year or softer, futures may have the green light to push through resistance.
Technically, the picture is clear.
Resistance sits at 6,541.75, with a breakout above likely triggering algorithmic buying toward 6,600.
Support rests at 6,520 and 6,500, levels that traders should respect on any pre-CPI pullback. The current narrow 10-point trading range screams consolidation before a major move.
The takeaway for futures traders is straightforward: the AI trade remains alive and well, and Fed easing expectations provide a supportive floor. But with inflation still sticky, the risk of a “buy the rumor, sell the fact” setup into the Fed decision is real.
Some of the best tells don’t happen at the open. They happen after hours. Futures whisper the real story when most traders log off. Miss that, and you miss half the game.
Discipline means sizing properly, letting the CPI print guide direction, and not chasing highs without confirmation.
At these levels, the tape is telling us that markets are ready to run—but only if the inflation data holds below 2.9%.
See you in the next one.
Imre Gams
Editor, The Trading Room
