Oracle Casts a Spell
Market Report for Thursday, June 12, 2025
Oracle Casts a Spell
Wall Street caught a whiff of optimism Thursday from Oracle’s booming AI guidance and a calm Treasury auction. But the air still carried a hint of smoldering tariffs. Stocks fluttered around UNCH, nudging north.
Level Change 6/12/25 (%)
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+0.2 Dow
+0.2 Nasdaq
+0.2 Nasdaq 100
+0.4 S&P 500
+0.1 S&P 400
-0.4 S&P 600
While the administration polishes its own-goal credentials in the circular sport of trade futzing, the main event plays elsewhere: a civilizational inflection point powered by AI.
First, the sideshow. Then the show.
Trade remains the main migraine. Thursday’s update on the US-China detente was less peace accord, more snooze button. If the handshake holds, it’ll merely rewind the clock to pre-April hostilities, undoing damage rather than advancing the plot.
Even that’s a big “if.” Talks set the tone; talks may un-set it. Meanwhile, talks with Japan, India, and the EU resemble couples therapy: tense, repetitive, and unlikely to end in dinner plans.
Never one to let a de-escalation go un-escalated, President Trump waved around fresh auto tariffs and reiterated his affection for unilateral moves. Raising the 25% levy is now on the table, like a bad centerpiece.
At least tariff damage is on an installment plan.
May’s PPI rose just 0.1% month-over-month, headline and core. But machinery and vehicles are getting pricier, with tariffs quietly working their way through the metals supply chain like minibar fees on a hotel bill.
Nationwide’s Ben Ayers called it a slow drip, not a sticker shock. Good news for May. Bad omen for September.
Speaking of slow drips, the labor market’s feeling more Eeyore than Tigger.
Initial jobless claims landed near expectations at 248K, but continuing claims climbed to their highest since November 2021: 1,956K vs 1,910K expected. Employers aren’t slashing jobs, but they’re not refilling them either. And once out, workers are staying out. It’s a softening, not a slump—unless tariffs blow a hole in demand and turn it into one.
Bond buyers, however, showed up and saluted for the second day in a row.
A $22B auction of 30-year Treasuries drew solid demand, especially from foreign investors. Yields dipped across the curve. Apparently, America’s reputation as a safe haven persists, even when its policy path resembles a GPS recalculating in mid-U-turn.
But all of this may soon read like a quaint historical footnote once AI takes over governance and finance, which it’s likely to do, faster than the distracted world can refresh its tariff trackers.
The latest evidence comes from Oracle (ORCL +13.3%), which stole the show last night. The firm projected growth rates that could make Nvidia blush: 40% in cloud infrastructure, 70% in cloud apps, and over 100% in remaining performance obligations.
“I’ve never seen anything remotely like this,” said co-founder Larry Ellison, as Wall Street nodded, drooled, and penciled in a few more zeroes.
Capital expenditures jumped from $7B to $21B in fiscal 2025 and are on track to top $25B this year. Cost control isn’t the problem, demand is. “Almost insatiable,” said Ellison. Oracle recently received a request from a mystery client for every bit of available cloud capacity. “We never got an order like that before,” Ellison said. “We had to move things around. We did the best we could to give them the capacity they needed.”
Also humming: CoreWeave (CRWV -0.5%), the AI server wrangler, which inked a deal to supply compute muscle to Google, which will in turn resell it to OpenAI. It’s a daisy chain of silicon dependency, now with more cross-brand entanglement than a Marvel crossover.
And that was the day: tariff talks going in circles, slowly tugging at the data, while AI gears up for its turn to run the place.
— Jason Kelly