Last updated – 21:45
Gains were limited for the S&P 500 and Nasdaq after the Federal Reserve announced its only rate cut this year. At the same time, the Dow Jones Industrial Average remained unchanged.
However, both indices are still moving higher by more than 1%, continuing the upbeat climate brought to the wall by a slight slowdown in US inflation in May.
The Federal Reserve decisions followed the inflation report, with the Federal Reserve keeping interest rates unchanged from last summer’s 5.25%-5.50% range, as expected. He also pointed out that there has been modest progress on the demonetisation front in recent months.
Indeed, Fed officials “see” one rate cut this year, two less than they predicted in March and one less than the two the market had predicted in recent days.
Investors’ attention will now be drawn to US Federal Reserve Chairman Jerome Powell’s regular press conference, and expect more clues about future moves in terms of monetary policy.
After the CPI data was released, but before the central bank’s decision, markets gave a 70% chance of a first rate cut in September, up from around 53% yesterday, and a second cut by the end of the year at 74%.
The consumer price index (CPI) in the world’s largest economy ran at an annual rate of 3.3% in May, down slightly from 3.4% in April, while prices were unchanged on a monthly basis. The reading was slightly better than analysts’ estimates, which had forecast an unchanged annual rate of 3.4% and a small monthly increase of 0.1%.
Underlying inflationary pressures saw similar movement, with the so-called structural index showing no decline as volatile food and energy prices. Notably, core CPI, the central bank’s preferred inflation gauge, eased to 3.4% year-on-year from 3.6% in April, slightly better than the consensus estimate of 3.5%. On a monthly basis, the structural index rose at a rate of 0.2%, slightly weaker than April’s 0.3%.
Investors welcomed the inflation data, indices rose, investor sentiment was boosted by a significant drop in US Treasury yields.
More specifically, on the dashboard, the Dow Jones Industrial Average shows little change and moves to 38,782.30 units. The broader S&P 500 rose 1% to 5,430.37 points, on its way to its third straight record high, while the tech-heavy Nasdaq rose 1.74% to 17,653.48 points, and is on track for a third straight day on track to hit a new record high. sequence.
On the business front, Oracle rose more than 7% after the company forecast double-digit revenue growth for the full fiscal year 2025.
Shares of Nvidia also rose nearly 3%, while Broadcom rose more than 2%, as did other tech stocks.
