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Stocks extended gains ahead of Thursday’s highly anticipated inflation report, seen as key to shaping expectations for the Federal Reserve’s interest-rate path this year.

Futures for the S&P 500 rose 0.2% after back-to-back all-time highs. European stocks climbed 0.3%, led by construction and retail shares. The dollar firmed. Treasuries held steady, with the 10-year yield at 4.04%.

Investors who have watched shares in Adobe Inc. get left behind in the AI craze have little reason for optimism ahead of the software maker’s latest quarterly results.

Wall Street is expecting a full-year sales forecast for growth of nearly 10% — a solid rate of expansion, but one that would be the slowest for Adobe in over a decade. Analysts see the pace receding every year through fiscal 2028, at a time when investors can target clearer AI winners like Oracle Corp. that are anticipating accelerating growth in the coming years.

As Mexico slaps steep tariffs on Asian imports, South Korea’s lack of a free trade deal with the Latin American country puts it at a disadvantage to Japanese rival carmakers.

Higher tariffs are expected to apply to a list of more than 1,400 categories of products coming from countries with which Mexico has no trade agreement. China, South Korea and India are among those exporters that would be hit if Congress approves the levies.

Gold edged lower, erasing some earlier gains that came after a surprise drop in US producer prices, which supported the case for the Federal Reserve to ease policy. Bullion fell as much as 0.7% to $3,614.26 an ounce, about $50 below the peak set earlier this week.

US producer prices unexpectedly fell for the first time in four months, supporting traders’ bets that US borrowing costs will be reduced next week. The next economic gauge to watch will be consumer price figures due later Thursday.

China should develop chips to create AI that doesn’t rely on the type of accelerators popularised by Nvidia Corp., a top government adviser said, warning that Asian companies in particular risk becoming beholden to US technology.

Asian nations, including China, should reduce their dependence on the general-purpose graphics processing units now used around the world to train platforms from ChatGPT to DeepSeek, Wei Shaojun, a professor at Beijing-based Tsinghua University, told a forum in Singapore.

Citigroup Inc.’s CEO said merger and acquisition activity is picking up as US companies grow more confident amid clearer policy direction, while a recession in the world’s largest economy appears unlikely.

Jane Fraser told Bloomberg TV that clients are “much more active” in capital markets, pursuing investments and deals following greater certainty around taxes, tariffs and deregulation. “Our client base now is really starting to act with confidence,” she added.

The US economic picture may be worsening, but for now, companies don’t show signs of firing employees, Wells Fargo Investment Institute strategist Scott Wren wrote.

“With the negative revisions to the prior month’s job gains taken into account, the domestic labour market is, at the very least, slowing noticeably,” he wrote. “But monthly job-creation numbers are not the only statistic to track. In most past cycles, initial jobless claims, reported every Thursday morning, have provided a good leading indicator for the likely path of domestic employment.”

Bond traders are bracing for today’s US inflation report, which could challenge their expectations of a series of steep Federal Reserve rate cuts beginning this month and extending into 2026.

Recent soft jobs data and subdued producer-price inflation have led the market to price in a near-certain quarter-point rate cut at the Fed’s September 16-17 meeting, with the possibility of two additional reductions before year-end.

Ryanair Holdings Plc Chief Executive Officer Michael O’Leary is bracing for airspace incursions like the drone barrage that disrupted Polish flights on Wednesday to continue.

“This is going to be an ongoing issue for all airlines for the next number of years,” O’Leary said Thursday at the Irish carrier’s annual general meeting in Dublin. He said Europe needs a strong response to what he called “Russian prodding.”

Oil prices eased some of their recent gains as a weaker supply forecast dampened concerns over geopolitical risks. The International Energy Agency (IEA) raised its outlook for a record oil surplus next year, pointing to increased production from OPEC+ and rising output from other suppliers.

Following the report, Brent crude wavered but stayed above $67 a barrel, still climbing more than 2.5% for the week. The pullback follows a three-day rally driven by rising tensions in the Middle East and Europe. US President Donald Trump’s criticism of Israel’s attack on Doha and Russia’s violation of Polish airspace briefly sparked a jump in futures as traders covered short positions.

S&P 500 futures were little changed Thursday, following another day of record highs, as Wall Street awaited a key consumer inflation gauge.

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