The S&P 500 rose 0.2% and was on track to set an all-time high for a second straight day. The Dow Jones Industrial Average was down 221 points, or 0.5%, as of 2:33 p.m. Eastern time, and the Nasdaq composite was mostly unchanged after both likewise set records the day before.

Stocks have been hitting records in large part because Wall Street is expecting the economy to pull off a delicate balancing act: slowing enough to convince the Federal Reserve to cut interest rates, but not so much that it causes a recession, all while inflation remains under control.

Many things must go right for that to happen, and an encouraging signal came from Wednesday’s report showing that inflation at the U.S. wholesale level unexpectedly slowed in August. It’s a relief following months of reports suggesting inflation would be tough to get under the Fed’s target of 2%, with President Donald Trump’s tariffs set to add only upward pressure on prices.

A potentially more important report is coming Thursday that will show how bad inflation has been for U.S. households, but Wednesday’s update “essentially rolled out the red carpet for a Fed rate cut next week,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Traders were already convinced that the Fed will deliver its first cut to interest rates of the year at its next meeting, but they need inflation data in the interim to come up mild enough not to derail those expectations. That’s because cuts to interest rates can push inflation higher, along with giving the economy a kickstart, and hot inflation could tie the Fed’s hands.

“The broader narrative is increasingly anchored on expectations that the Fed will deliver a rate cut at next week’s meeting,” said Ahmad Assiri, research strategist at Pepperstone.

On Wall Street, tech stocks helped lead the way after Oracle said AI-related demand is set to send its revenue surging. CEO Safra Catz said Oracle signed four multi-billion dollar contracts during its latest quarter, and it expects cloud infrastructure revenue to jump 77% to $18 billion this fiscal year. After that, it expects such revenue to soar to $144 billion in just four years.

“AI Changes Everything,” Oracle Chairman Larry Ellison said in a statement.

Oracle stock leaped 34.4% and was potentially heading for its best day since 1992, even though it also reported results for the latest quarter that came up just shy of analysts’ expectations.

Taiwan Semiconductor Manufacturing Co., which makes chips used in AI and other computing, saw its stock that trades in the United States climb 3.5% after it said its revenue jumped nearly 34% in August from a year earlier.

Nvidia, the chip company whose stock has become the poster child of the AI boom, rose 3.2%. It was one of the strongest single forces lifting the S&P 500, along with Oracle.

Outside of tech, Novo Nordisk’s stock that trades in the United States added 0.2% after the company behind the Wegovy weight loss drug said it would cut 9,000 jobs to reduce costs, mostly in its home country of Denmark. It’s been contending with more competition in the market to help obese people lose weight.

On the losing side of Wall Street was Apple, whose drop of 3% helped drag the Dow lower and was the heaviest weight on the S&P 500. Some analysts said its unveiling of new iPhones the day before contained no surprises and may not drive much growth in demand.

Synopsys, which helps customers design and engineer chips, fell 35.5% after reporting profit for the latest quarter that fell short of analysts’ expectations. So did its forecast for profit in the current quarter.

Klarna, the Swedish “buy now, pay later” financial services provider, jumped in its public debut. The stock, which was priced at $40 per share, was up about 15% after it started trading on the New York Stock Exchange Wednesday afternoon.

In stock markets abroad, indexes were mixed in Europe after rising across much of Asia. South Korea’s Kospi rose 1.7%, and Hong Kong Hang Sang climbed 1% for two of the bigger moves.

In the bond market, the yield on the 10-year Treasury eased to 4.03% from 4.08% late Tuesday after the encouraging report on wholesale inflation bolstered expectations for coming cuts to interest rates.