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Oracle (ORCL) shares hit a record high Wednesday following a report that ChatGPT maker OpenAI is looking beyond Microsoft (MSFT) to supply servers, paving the way for a potential new partnership with the enterprise software giant.

Tech industry focused publication reported that OpenAI’s leadership recently told staff that the company planned to take on a larger role in securing data centers and artificial intelligence (AI) chips, rather than relying exclusively on Microsoft.

In June, the company rented Oracle servers at a new data center in Texas with limited input from Microsoft, according to the report. At the time, OpenAI’s CEO Sam Altman said that the software company’s Oracle Cloud Infrastructure (OCI) would allow it to scale, while Oracle CEO Larry Ellison pointed out that AI leaders such as OpenAI are turning to the company for its fast, cost-effective AI infrastructure. 

Oracle shares have surged around 25% in the past month and gained nearly 70% year-to-date through Wednesday’s close, boosted in part by a recent multicloud partnership with Amazon’s (AMZN) cloud business.

The stock rose 2.3% to close Wednesday's session at $178.29, after hitting an all-time high of $178.61.

Below, we take a closer look at Oracle's weekly chart and use technical analysis to point out important price levels to watch out for.

Oracle shares traded within a three-year rising wedge before staging a decisive volume-backed breakout above the pattern last month.

Since that time, the stock has continued to trend sharply higher, though share turnover has decreased following the initial breakout.

While, the relative strength index (RSI) confirms bullish price momentum, it also cautions of short-term overbought conditions with a reading above 80. It’s worth pointing out that the last time the indicator flashed above this threshold in June last year, the stock underwent a correction of around 22% over the following six months.

We’ll now identify three important lower chart area that could come into play during pullbacks and use a bars pattern to project a price target if the stock continues its long-term uptrend.

The first location to monitor sits around $146, an area on the chart where the shares could find initial support around the July swing high and wedge pattern’s top trendline.

Selling below this level could see the shares revisit the $127 level, a region just below the wedge’s lower trendline that would likely encounter support from multiple highs on the chart between June 2023 and May this year, which also closely aligns with the 2024 August low and upward sloping 50-week moving average (MA).

A deeper correction could bring the psychological $100 round number into play. Investors would likely look for buying opportunities in this area near the closely-watched 200-week MA and prominent peaks and troughs that formed on the chart from October 2021 to December last year.

A bars pattern uses historical trends to predict future moves. To apply this technique on Oracle’s chart, we take the stock’s trend higher from October 2022 to June last year and overlay it from the August low, which projects a price target of around $250.

We selected this earlier trending period because it began from the rising wedge’s lower trendline, similar to how the stock’s current move higher started. Interestingly, the prior trend played out over 36 weeks, meaning a comparable move could potentially last until early April if price history were to rhyme.

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The cost of living likely didn’t rise much in September, as a continuing trend of cooler inflation was a relief for household budgets and the economy.

Forecasters expect Thursday's Consumer Price Index report to show consumer prices rose 0.1% in September, down from a 0.2% increase in August, according to a survey of economists by and . That would mean consumer prices rose 2.3% over the past year, down from a 2.5% annual increase in August. That would be a fresh low since February 2021, and one step closer to the Federal Reserve’s goal of a 2% annual rate. 

“September will be another good month for inflation,” Bernard Yaros, lead U.S. economist at Oxford Economics, wrote in a commentary.Should the report match expectations, it would be the latest evidence showing inflation is back to running at a mild tempo after surging in the immediate aftermath of the pandemic. Cooling inflation can give household budgets a break in two ways: shoppers won’t see rapidly rising price tags, and borrowing costs for all kinds of loans fall as the Federal Reserve rolls back the high interest rates it maintained in order to push down inflation.

Although cooler inflation could help justify the Fed's rate cuts, policymakers may be in no hurry to slash rates quickly like they did in September. The job market remains resilient despite high interest rates, meaning that the Fed is under little pressure to cut rates quickly to bolster the economy.

Financial markets have ruled out a super-sized rate cut when the central bank’s policy committee next meets in November, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. Now market participants have priced in a smaller 0.25 percentage point cut, with a 21% chance that the Fed will leave interest rates as they are.

There are a few areas where prices likely still rose rapidly, keeping “core” inflation, which excludes volatile prices for food and energy, running hotter than the Fed would like. Prices for used cars likely rose 1% over the month, while airline tickets increased 0.5%, according to a forecast by economists at Goldman Sachs. Meanwhile, increases in housing and car insurance are likely leveling off after surging earlier in the year.The median forecast by economists expects core prices rose 0.2% in September after a 0.3% increase in August, making for a 3.2% rise over the year, the same annual rate as the month before. 

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Tesla (TSLA) is expected to unveil its autonomous "robotaxi" on Thursday, after the event was delayed from its original date in August, with analysts expecting a number of updates from the electric vehicle (EV) maker.

Deutsche Bank and Wedbush analysts wrote recently that they expect to see a demo of the vehicle, rumored to be called the "Cybercab," along with projections of how much the robotaxi will cost to operate, where it will be produced and be available, and what Tesla's version of a ride-sharing app could look like.

The analysts also said they expect that Tesla could show a new, lower-cost vehicle that has been a company goal for years, along with other updates on its self-driving software, its Optimus humanoid robot, and more.

Wedbush analysts, reiterating an "outperform" rating with a $300 price target, said they "continue to believe Tesla is the most undervalued AI name in the market," and see the robotaxi unveiling as a "seminal and historical day" in its history. Deutsche Bank analysts, who have a "buy" rating and a $295 price target, said they are optimistic headed into the event, but recognize that high expectations could lead investors to "sell the news" following the event.

Overall, analysts are more divided on Tesla stock. Of the 19 analysts tracked by Visible Alpha, nine have "buy" ratings, seven have "hold," and three have "sell" ratings, with an average price target at $220.44, nearly 9% below Wednesday's close at $241.05 a share.

Tesla shares have largely recovered after a substantial selloff in the first half of the year, but remain about 3% lower for 2024 so far.

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Hurricane Ian caused about $56 billion in insured losses in 2022, but the damage from Milton could be even worse since more people have moved to coastal Florida in recent years, according to new research.

Piper Sandler in a recent report didn't have a dollar estimate, but “it is clear that there will be substantial personal, economic and insured damages,” analyst Paul Newsome wrote. Analysts at Jefferies have projected that the storm could cause tens of billions of dollars of economic losses. Much of the state is bracing for the possibility of serious disaster relief efforts.

The storm could weigh on the shares of insurance companies with heavy exposure in Florida, which Piper Sandler's note pegged as Allstate (ALL), American International Group (AIG), and Progressive (PG). Historically, shares of insurers have fallen as a hurricane approaches and recovered when the companies announce their official losses, Piper Sandler said.

Allstate stock, for example, is down 3% since Friday.

Insurers will often reduce the availability of insurance and raise policy prices after a storm to make the impact a net positive for the industry, the Piper Sandler report said. Demand for insurance is also higher in the aftermath of a bad storm, which could be particularly acute if Milton is a historically devastating hurricane, the analyst said.

Not all hurricane damage is created equal, however. Wind damage is typically covered by private insurers, Piper Sandler noted, while flood damage is largely covered by the federal government.

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It turns out that Federal Reserve policymakers were more divided about the decision to make a super-sized cut to borrowing costs in September than the committee’s final vote indicated. 

A few members of the Federal Open Market Committee would have preferred to cut the central bank’s benchmark interest rate by 0.25 percentage points rather than the 0.5 percentage-point cut the central bank went with, according to minutes of the committee’s deliberations released Wednesday. In the end, only one of the committee’s 12 members voted for the smaller cut.“Some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision,” the minutes said. “Several participants noted that a 25 basis point reduction would be in line with a gradual path of policy normalization that would allow policymakers time to assess the degree of policy restrictiveness as the economy evolved.”

The minutes shed light on what policymakers were thinking last month during a pivotal meeting during which they decided to cut the central bank’s benchmark interest rate to a range of 4.75% to 5%. The Fed had kept its rate at a two-decade high for more than a year, pushing up borrowing costs on all kinds of loans to slow the economy and subdue inflation.With inflation cooling back down toward the Fed’s goal of a 2% annual rate, Fed officials had grown less worried about high inflation, the minutes showed. They were more concerned about the job market's health, which had seen a slow but steady increase in the unemployment rate over the last year. By law, the central bank is supposed to use monetary policy to keep inflation low and employment high.

Since then, economic data has complicated the interest rate outlook. 

The labor market staged a surprising comeback in September, as employers hired more workers than expected, pushing the unemployment rate down, while inflation is expected to continue to ease.

Financial markets are uncertain whether the Fed will cut rates again when the FOMC next meets in November. On Wednesday afternoon, traders were pricing in an 81.4% chance of a 0.25 percentage-point cut in November, down from 85.2% the day before, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

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Hewlett Packard Enterprise (HPE) will kick off its AI Day event at 1:45 p.m. Eastern Time Thursday, with a webcast featuring CEO Antonio Neri, CTO Fidelma Russo, and others.

Bank of America analysts expect the artificial intelligence (AI) server maker to focus on its liquid cooling technology and the manufacturing and deployment of large-scale AI systems at the event. Larger, more dense data centers require liquid cooling to maintain their temperature and the demand for powerful AI server racks is growing noted the analysts.

“As computing moves to larger scale clusters, we expect HPE to benefit from their unique history to deploy large scale systems at scale,” the analysts said in a note Tuesday, adding that with “the projected power demands of Nvidia's (NVDA) next gen AI chips, liquid cooling will become a definite need within the industry." 

Bank of America maintained its "buy" rating and a price target of $24, about a 15% premium over Wednesday’s intraday price of $20.78. Shares of HP Enterprise have gained more than 22% since the start of the year.

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