US futures on the rise after yesterday's Oracle boost

• European stocks gain ground despite likely end to ECB easing.
• US futures on the rise after yesterday's Oracle boost.
• US CPI provides final hurdle before FOMC meeting.

European equities opened higher this morning, with the CAC once again leading the way higher as investors position ahead of today’s ECB meeting. Policymakers are widely expected to keep rates unchanged, with markets increasingly convinced the easing cycle has run its course. Inflation remains largely at target, and economic indicators such as the manufacturing PMI have managed to make a significant recovery over the past year. This highlights the potential desire for the ECB to hold back some ammunition, shifting the focus away from further stimulus and towards the resilience of the underlying economy. Traders will be closely following Lagarde’s testimony for any signs that the rate cuts are behind us, while economic projections also tell a story around the direction of travel for the eurozone.

US futures are pointing higher after yesterday’s session that saw Oracle surge 36% - the largest single-day gain ever recorded for a company worth over $500 billion. The move was sparked by a bullish update on its AI-driven cloud infrastructure business, triggering gains in peers Broadcom and Nvidia. The rally underscored the market’s insatiable appetite for exposure to the AI supply chain, with investors clearly prepared to reward forward-looking growth even at stretched valuations. With tech still setting the pace for broader indices, momentum looks set to carry through into today’s Wall Street open.

Attention now turns to the US inflation picture, with August CPI due later today. Consensus looks for a 0.3% monthly increase, keeping year-on-year inflation below 3% and reinforcing the narrative of controlled inflation pressures. Yesterday’s PPI release saw a welcome decline to –0.1%, allaying last month’s fears of an inflationary surge in the wake of a 0.9% monthly figure. Markets now see next week’s Fed meeting as a near-certainty for a 25bp rate cut, with a small but notable minority pricing in the possibility of a bolder 50bp move. Given this week’s –911k payroll revision, another controlled inflation report today provides the basis for the Fed to cut rates in confidence next week.