By Carmel Crimmins, Reuters Econ World podcast host

Hello there,

U.S. consumer prices rose more than expected last month, but the data is not expected to prevent a much-anticipated interest rate cut from the Federal Reserve next week.

Downbeat news on the labor market means that a quarter percentage point rate cut is fully priced in. But sticky inflation could fan concerns of stagflation, complicating the way for rate cuts beyond September.

For now, the bad news on the jobs front is firing up investor bulls, with both stocks and bonds rising. Oracle is the new (old?) kid on the block for investors. Its 43% share price surge on Wednesday is truly a moment, underscoring how AI, not the so-called Magnificent Seven group of stocks, is the driving force on Wall Street.

The cloud computing company expects revenue to exceed half a trillion dollars as companies aggressively spend to secure capacity for the AI race.

Oracle is not a penny stock, startup, or meme stock, and my colleague Jamie McGeever points out that a surge of this magnitude should make everyone reassess where markets are, and whether the AI boom is moving into unsustainable territory.

Oracle has nearly doubled in value this year, trouncing gains made by the Magnificent Seven and propelling co-founder Larry Ellison closer to the top of the world's richest list.

Ellison is not a household name like Elon Musk, but he is hugely influential in Silicon Valley, and his son, David, has ambitious plans to rejuvenate Paramount, which he acquired last month in an $8 billion deal.

Over in Frankfurt, the European Central Bank kept interest rates steady, as expected, and offered no clues about its next moves.

Investors continue to bet that more support will be needed as inflation dips below target next year, but for now, at least, the ECB seems to be betting that the euro zone can handle U.S. tariffs, higher German government spending, looming Federal Reserve rate cuts, and political turmoil in France.

Speaking of political turmoil, there is plenty of it around right now, from Argentina to Nepal and Japan. It’s part of the reason why longer-term bond prices have dipped as investors fret about government spending.

Political instability is less of an issue right now in Britain -- the firing of Peter Mandelson as UK ambassador to the United States notwithstanding. But the UK is in a league of its own when it comes to the cost of its long-term debt. We get into why Britain has to pay so much to borrow money in this week’s Reuters Econ World pod and whether talk of a potential fiscal crisis is overblown. Listen here.

As always, I'd love to hear from you by hitting reply on this email or finding me on LinkedIn.  

 A record AI-driven surge in Oracle's share price is putting co-founder Larry Ellison within striking distance of the world's richest person title.

“ As we approach this November budget, it is being seen as a key risk event."

Dhara Ranasinghe, Reuters editor for financial markets, Europe, the Middle East and Africa on Reuters Econ World. Listen now. 

On this week's show, we look at why Britain has to pay so much to borrow money and whether talk of a potential fiscal crisis is overblown.