Dow jumps, S&P 500 hits record on cool inflation data as Fed decision looms
Stocks jumped on Wednesday after inflation slowed in May, sending yields tumbling before the Federal Reserve’s June interest rate decision. see cap 3 for 10y
The Dow Jones Industrial Average traded 85 points higher, or 0.2%. The S&P 500 climbed 1.1% to a fresh record. The Nasdaq Composite also hit a new all-time high, gaining 1.9%. Both the S&P 500 and Nasdaq had cinched closing records in the prior session.
The consumer price index was unchanged for the month of May, lower than the Dow Jones estimate for a 0.1% monthly increase. Year over year, the inflation yardstick increased 3.3%, which also came in below expectations and represented a slowing from the prior 3.4% pace. Monthly and yearly numbers for core CPI, which excludes the volatile prices associated with energy and food, were also lower than anticipated. The 10-year Treasury yield dropped back below 4.3% as inflation concerns eased ahead of Wednesday’s conclusion of the Fed’s two-day policy meeting. The Fed will provide new forecasts for rate cuts and inflation Wednesday afternoon, followed by a press conference with Federal Reserve Chair Jerome Powell. “I think that absent this data, they’re going to have quite a hawkish tone, with most of that probably written in stone in terms of the statement and dot plot,” said Jay Hatfield, founder and chief investment officer of InfraCap. “I don’t think they have time to change the dot plot … but Powell will probably soften his tone a little bit because of this print.” Fed funds futures indicated traders were putting the odds of an interest rate cut in September at about 70% following the data, up from even odds a day before. Futures now showed the market pricing in a 74% chance of a second cut by the end of the year. Traders were still predicting no change at Wednesday’s meeting or in July.
Stocks that have been under some pressure lately on concern higher rates were suffocating the economy turned higher following the light CPI report and subsequent slide in yields. Bank of America and other financial shares increased. Home Depot and Lowe’s jumped.
Nvidia, Broadcom and other technology shares also gained as the cooler inflation figures renewed investors’ risk appetites.
Shares of Oracle
jumped 15% as traders fixated on the software maker’s newly announced cloud deals with Google and OpenAI, overlooking misses in the company’s latest quarter.
https://www.cnbc.com/2024/06/11/stock-market-today-live-updates.html
https://tradingeconomics.com/united-states/inflation-cpi
https://tradingeconomics.com/united-states/government-bond-yield
https://fred.stlouisfed.org/series/M2SL
>>20997428 pb
Economic Schedule for Week of June 9, 2024-Headlines: NYFED Williams hit piece-replaced soon
re:CPI on above post as it’s all about money supply
>for sure it’s gonna “surprise” cuz what do they need this to be….all political