Markets reopen this morning after the Labor Day break into a four-day week that contains both of the inflation prints the Federal Reserve will carry into its September 15–16 meeting — and, on Thursday evening, the single most interesting earnings report of the quarter.
Oracle reports Thursday, and the setup is unusual
Oracle (ORCL) reports fiscal Q1 2027 results after the close on Thursday, September 10, alongside Adobe. The reason it matters extends well beyond Oracle's own shareholders.
Oracle just closed the best fiscal year in its history:
FY2026 total revenue of $67.4 billion, up 17% — the first time it crossed $67 billion
Total cloud revenue of $34.0 billion, up 39%
Cloud infrastructure (IaaS) revenue of $18.1 billion, up 77% for the year, and up 93% in the fourth quarter alone
FY2026 non-GAAP EPS of $7.63, up 27%
Remaining performance obligations of $638 billion, after growing $85 billion in the fourth quarter alone from $553 billion
That last figure is the one to hold onto. RPO is contracted work not yet delivered — revenue Oracle has already sold and has not yet recognized. At $638 billion, it is nearly ten times the company's entire annual revenue.
And the stock trades near multi-year lows.
Why a record backlog has not translated into a stock price
Oracle closed recently around $142, roughly 59% below the $345.72 high it set in September 2025, with the peak-to-trough decline reaching nearly 65% at the July low. A company growing cloud infrastructure revenue 93% does not normally trade like that. Three things explain it:
The cash burn. FY2026 capital expenditures reached $55.7 billion against $32 billion of operating cash flow, putting free cash flow around negative $23.7 billion. For fiscal 2027, CFO Hilary Maxson guided to roughly $70 billion in net cash capex and told investors Oracle expects to raise about $40 billion in debt and equity to fund it.
The credit rating. S&P Global cut Oracle to BBB− in July — one notch above high yield — on a company already carrying net debt to EBITDA above 4x. Moody's noted that no other hyperscaler is investing this aggressively with cash flow this stretched.
The power problem. Backlog only becomes revenue when the data centers are energized. In mid-August, a gas pipeline a supplier is building to power one of Oracle's planned sites slipped six months. The market's fear is no longer whether the demand is real — $638 billion of signed contracts settles that. It is whether Oracle can secure electricity and finish sites fast enough to convert the backlog into cash before the debt raised to build it comes due.
That is a genuinely different risk than the one facing the rest of the AI complex. Nvidia, Broadcom and Ciena are selling into the buildout and collecting cash. Oracle is financing the buildout and paying cash out, years ahead of the revenue.
Thursday's report is where investors find out whether the conversion is on schedule. The numbers to watch are RPO growth, the pace of capex against the $70 billion guide, and any commentary on site energization timelines.
The two prints that decide the Fed
The macro calendar is short and heavy:
Thursday, September 10, 8:30 a.m. ET: August Producer Price Index
Friday, September 11, 8:30 a.m. ET: August Consumer Price Index
These are the last inflation readings before the FOMC meets September 15–16 with the funds rate at 3.50%–3.75%.
The setup changed on Friday. August nonfarm payrolls came in at 162,000 against a consensus near 55,000, roughly triple the forecast and above every estimate in Bloomberg's survey. Unemployment held at 4.1%, and June and July were revised up by a combined 55,000 — turning July's reported 23,000 job loss into a 21,000 gain.
Market response was immediate:
CME FedWatch odds of a September hike moved from about 50% to roughly 60%
The two-year Treasury yield rose to 4.38%, its highest since January 2025; the 10-year sat near 4.78%
Gold fell from $4,490.89 to $4,365.57 before recovering part of the move
The S&P 500 closed at 7,718.60, down 0.38%; the Dow at 53,414.25, down 0.51%; the Nasdaq at 26,506.99, down 0.29%
For two months, the argument against a hike rested on a weakening labor market. That argument is gone. Chair Kevin Warsh has said plainly that inflation is his predominant concern, with twelve-month PCE running at 3.7%. If CPI comes in hot on Friday — particularly with the ISM services prices index already at a four-year high — a September hike becomes the base case rather than a coin flip.
The one piece of evidence pointing the other way is wages. Average hourly earnings decelerated to 3.1% year over year, the slowest since May 2021, while the labor force expanded by 683,000 people and participation rose to 61.6%. Hiring that strong with wage growth that soft is labor supply returning, not an economy running hot.
The rest of the week
Beyond Oracle and Adobe, the earnings calendar is light and consumer-heavy — GameStop was scheduled for Monday, Chewy, Signet and Academy Sports report Wednesday morning, Macy's Thursday morning, and Kroger Friday before the open. Those retail prints matter more than usual after lululemon cut its full-year outlook and lost 17% of its value on Friday. The consumer question is live again.
Elsewhere, the trade backdrop remains an underappreciated variable heading into the fall, and the leverage in that relationship is not where most investors assume it is.
The upgrade cycle also kept running through the holiday, with several names carrying fresh analyst upgrades into the week.
What to actually watch
Three things, in order of consequence:
Friday's CPI. It determines the September Fed decision more than anything else on the calendar.
Oracle's RPO and capex commentary Thursday night. It is the cleanest available read on whether the AI infrastructure buildout is still converting contracts into delivered revenue on schedule.
The reaction function. Last week, four companies beat expectations and three of them fell. Until that changes, a good number is not the same thing as a good outcome.
Short week, heavy calendar, and a Federal Reserve decision waiting immediately on the other side.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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