SOTS 2nd Hour: Producer Inflation Breakdown, Klarna CEO Talks IPO, & Oracle's Best Day Since '92 9/10/25

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Sara Eisen (0:53)

Good Wednesday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks starting off strong. The S&P's up another half a percent right now. What's leading? No surprise, information technology. Thank you, Oracle, and that's incredible. Now almost 40% rise in the stock, but also strong day for Broadcom up 7%, Supermicro up 5%, NVIDIA's rallying 4%. So really the entire AI trade back front and center. Energy's also higher today. Industrials, utilities, materials, real estate stocks, those are all working as we sit at record highs for the S&P 500 As for treasuries, take a look. Can't wait to talk about this inflation report that we got. Well, it's leading the bond market to rally further. The 10-year yield, 4.061%, so just above 4%. The two-year rally's more sharply 3.5% there.

Although, the 30-year, I would note, is selling off with a little bit of a firmness. Today, a major IPO in the fintech space, Klarna, the CEO, will join us in a first on CNBC interview ahead of the buy now, pay later company's first trade here at the big board. Plus, Oracle shares exploding higher, nearing a trillion dollars now in market cap after the company's bullish guidance stunned Wall Street. Is it too late to get in if you missed the pop? And then, Fed share contender and Jeffrey's chief market strategist, David Zervos, will be here at Post 9 with the case for a jumbo cut. Yes, he is now calling for 75 basis points at next week's Fed meeting.

Carl Quintanilla (2:24)

Meantime, PPI was a big story, but we're getting some inventories. Let's get back to Rick Santelli. Hey, Rick.

Rick Santelli (2:29)

Yes, indeed, that PPI was a big story. All right, Carl, the monthly numbers turning negative first time since April. Wholesale inventories and trade sales. These are coming out July final on inventories. It moves from 2 tens to up 1 ten from the mid-month read. But on trade sales, this is a fresh July number, Carl, and it is a biggie. We're expecting up 2 tens, up 1.4 percent. That is the best since February when it was 2 percent, and it's the second best number of the year. And there's a positive revision in the rear view mirror from up 3 tens to more than doubling it to up 7 tens. It is a good thing. We all know that there has been tariff-related issues regarding inventories. To see the sales whittling that down is a good thing. And interest rates? Well, Sara nailed it. It's 4 percent is what everybody's paying attention to. It's basically the low-yield close of all of 2025 It may be a tough road to get there, especially on a closing basis, due to all the debt and deficit issues. Remember, supply. Today we have 10 year. Tomorrow we have 30 year. We'll pay very close attention to both of those auctions at 1 o'clock Eastern. And Sara, back to you.

Sara Eisen (3:42)

Okay. Yes. We'll be looking for you for those auction results. Thank you, Rick Santelli. Let's touch on what we got this morning. The inflation report. So this is wholesale inflation, PPI. We'll get a better look at what the consumer's paying tomorrow. But this is a wow number because we did see it actually fall. Who would have thought? Everyone was so worried about tariffs and we get a negative 0.1% number on the monthly number. Go to core, strip out food and energy. We know the Fed pays attention to core. Guess what? Also, a negative number. Now, I don't want to say that tariffs aren't having any impact because if you do look beneath the surface, you see goods prices still elevated. Core goods prices rising consistently up 0.3%. But services, and we're a services economy, and this would be evidence that it's spreading into the broader economy, down 0.2%.

What is the takeaway? We just don't have an inflation problem. And this is just more evidence for the Fed that it should be cutting rates, because if they were worried about tariffs producing inflation, and that's why they were not cutting, guess what? Six of the last seven PPI reports have come in worse than expected, sorry, lower than expected, which is actually good news on the inflation front.