Traders work on the floor of the New York Stock Exchange on June 12, 2024, as a screen displays the Federal Reserve’s interest rate announcement.
Brendan McDiarmid | Reuters
of S&P 500 Stocks soared to record highs, closing above 5,400 for the first time on Wednesday, after the Federal Reserve’s latest policy announcement and May inflation data suggested price pressures were easing.
The composite index rose 0.85% to close at 5,421.03. Nasdaq Composite Index It rose 1.53% to close at 17,608.44. Both the S&P 500 and Nasdaq hit all-time highs and closed at record highs on Wednesday. Dow Jones Industrial Average It fell 0.09 percent, or 35.21 points, to close at 38,712.21.
The Fed left interest rates unchanged, as widely expected, and also signaled progress on the inflation front, saying “in recent months, inflation has made more moderate progress toward the Committee’s 2 percent inflation objective.”
But in the Fed’s latest forecast, also released Wednesday, the central bank expects to cut interest rates just once this year, down from the three cuts expected in early 2024.
Wednesday’s announcement follows the release of the latest U.S. inflation data, which appears to suggest a trend of slowing inflation.
The Consumer Price Index was unchanged in May, below Dow Jones’ forecast of a 0.1% monthly increase. On a year-on-year basis, the inflation gauge rose 3.3%, also below expectations and slowing from the previous 3.4% increase. The monthly and annual figures for core CPI, which excludes variable prices related to energy and food, also came in below expectations.
“The CPI has neutralized the Fed’s hawkish stance,” said Jay Hatfield, founder of InfrastructureCap. “Most market participants believe the economy is slowing and they need to cut rates, so I think the market has discounted this very hawkish policy.” [Summary of Economic Projections] With just one cut.”
The weaker-than-expected consumer price index data pushed government bond yields lower, with the 10-year yield falling to 4.25%, its lowest level since April 1.
