TSX up after index logs fresh record high close
- U.S. CPI data, Fed rate cut expectations will be in focus this week.
- With its cloud business gaining momentum and its AI initiatives driving growth, Oracle is a strong buy ahead of earnings.
- Given the combination of falling oil prices and macroeconomic headwinds, ExxonMobil is a stock to sell this week.
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U.S. stocks briefly hit record highs on Friday before reversing course to end lower, after the weak August jobs report bolstered hopes for more Fed rate cuts, but also raised concerns that the economy is stalling out.
Source: Investing.com
Even with Friday’s losses, the S&P 500 and the tech-heavy Nasdaq still finished the week with gains, rising 0.3% and 1.1%, respectively. The small-cap Russell 2000 advanced 1%, hitting fresh 2025 highs. The 30-stock Dow Jones Industrial Average, however, saw losses on the week, closing down 0.3% in the period.
More volatility could be in store in the week ahead as investors assess the outlook for the economy, inflation, interest rates and corporate earnings amid ongoing trade tensions.
On the economic calendar, most important will be Thursday’s U.S. consumer price inflation report, which is forecast to show headline annual CPI rising 2.9% year-over-year in August, accelerating from 2.7% in the previous month. The CPI data will be accompanied by the release of the latest figures on producer prices, which will help fill out the inflation picture.
Source: Investing.com
Meanwhile, there will be no Fed speakers on the agenda as the central bank goes into its pre-FOMC blackout mode ahead of the September 16-17 policy meeting. Traders are pricing in a 10% chance of a jumbo-sized 50-basis point cut later this month, while the probability of a 25bps cut is at nearly 90%.
And while the earnings season is almost over, a few notable companies will report in the coming week, including tech giants Oracle (NYSE:ORCL) and Adobe (NASDAQ:ADBE), meme stock GameStop (NYSE:GME), and pet e-commerce company Chewy (NYSE:CHWY).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, September 8 - Friday, September 12.
Stock to Buy: Oracle
This week, Oracle stands out as a promising buy as its fiscal first-quarter earnings are expected to showcase robust growth in cloud services, AI integrations, and enterprise software. The tech giant is scheduled to release its Q1 update after the closing bell on Tuesday at 4:05PM EST. A call with CEO Safra Catz as well as Chairman and Chief Technology Officer Larry Ellison is set for 5:00PM ET.
Market participants predict a sizable swing in ORCL stock after the print drops, with a possible implied move of +/-5.5% in either direction, according to the options market. Shares gapped up by over 12% after the last earnings report in June.
Source: InvestingPro
Consensus estimates call for Oracle to report adjusted earnings of $1.48 per share, rising 6.5% from EPS of $1.39 in the year-ago period. Revenue is forecast to increase 12.8% to $15 billion, reflecting strong AI-driven demand for its database solutions and cloud infrastructure services.
Analyst sentiment is optimistic, with 12 upward revisions to sales estimates in the past 90 days and inclusion on Mizuho’s “Top Picks” list. Traditionally known for its leadership in database management, Oracle has been aggressively pivoting toward cloud computing, and this shift is expected to drive significant growth in the coming years. Furthermore, the company’s focus on AI and machine learning integrations within its cloud platform has also been a major differentiator.
Given these dynamics, Oracle’s management is likely to provide strong guidance for the rest of the fiscal year as its cloud and AI prospects are firing on all cylinders.
Source: Investing.com
ORCL stock ended Friday’s session at $232.80, consolidating below its July all-time high of $260. Technical analysis paints a bullish short-term picture: ORCL’s 1-hour signals are overwhelmingly “strong buy” —RSI at 69.4 (borderline overbought), bullish MACD, and nearly all moving averages pointing north.
Additionally, InvestingPro’s AI-powered quantitative models rate Oracle with a “GOOD” Financial Health Score of 2.6/5,0, highlighting its solid earnings prospects, and a robust profitability outlook. Furthermore, it should be noted that the tech company has raised its annual dividend payout for 11 years in a row.
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Stock to Sell: ExxonMobil
In contrast, ExxonMobil, a leading name in the energy sector, faces a more challenging environment as OPEC+ gets set to raise oil output starting in October. The decision to raise oil supply is likely to exert downward pressure on crude prices, which poses potential headwinds for XOM.
U.S. West Texas Intermediate (WTI) crude closed at $61.87 a barrel on Friday, down 2.5%. WTI prices are at risk of falling back towards the year-to-date low of $55.30 from early May.
Source: Investing.com
OPEC+, which includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, will likely agree to raise oil production by between 130,000 and 140,000 barrels per day, Iraq’s OPEC delegate Mohammed al-Najjar told reporters on the sidelines of an energy conference in Baghdad before an online meeting of the group’s members due to start on Sunday afternoon.
The increase is intended to boost market share amid pressure from President Donald Trump for lower oil prices. This is expected to drive crude prices down to $58 per barrel in Q4 2025 and around $50 in early 2026, squeezing refining margins and upstream earnings for majors like XOM.
The oil major next reports financial results on October 30. Analysts project Q3 revenue of around $85 billion (down from $90 billion in Q3 last year) and adjusted EPS of $1.74 (down 9.8% YoY), with potential for weak Q4 guidance if prices dip below $50.
Source: Investing.com
XOM closed at $109.23 on Friday, falling below its 200-day moving average ($109.79) and moving further away from its 2025 peak ($119.90). ExxonMobil’s technicals have turned “sell” on daily and weekly—moving averages and oscillators agree, and recent price drops mirror sector malaise.
While the company has a strong balance sheet and a history of returning capital to shareholders through dividends and buybacks, the near-term outlook for oil prices is a significant risk.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), and Invesco S&P 500 Equal Weight ETF (RSP).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.