Investing.com — The S&P 500 and Nasdaq closed at record highs for a second straight day on Tuesday, buoyed by lower Treasury yields and Apple’s surge to an all-time high, but there was also some caution ahead of the Federal Reserve’s interest rate decision.
As of 4:00 PM ET (8:00 GMT), the FTSE rose 0.3% and the FTSE rose 0.9% to close at record highs, but the FTSE was down 120 points, or 0.3%.
Apple hits record high after unveiling AI strategy
Apple (NASDAQ:) rose 7% to a record high after Wall Street cheered the company’s AI strategy, unveiled at its annual developers conference the previous day.
Aiming to boost artificial intelligence capabilities expected during the iPhone upgrade cycle, Apple has announced a partnership with OpenAI to integrate the ChatGPT chatbot into its products.
The AI features will only be backwards compatible with the iPhone 15 Pro, “which could lead to a much-anticipated iPhone upgrade cycle,” DA Davidson said in the note.
Treasury yields fall as 10-year Treasury auction signals rising demand
The yield fell 7.4 basis points to 4.397 percent after a $38 billion 10-year note auction sold at a lower-than-expected yield, a sign of growing demand.
The better-than-expected auction results also put pressure on yields on two-, five- and 30-year government bonds.
Fed begins meeting as interest rate decision looms
The central bank begins a two-day policy meeting on Tuesday and is widely expected to keep interest rates unchanged in a range of 5.25% to 5.5% on Wednesday.
The monetary policy statement will also include the Fed’s latest “dot plot” – its outlook for interest rates, inflation and unemployment – while any comments from the Fed chairman are also expected to grab investors’ attention.
In addition to the Fed’s decision, the Fed is also due to release its May Fed inflation rate, a highly anticipated gauge of inflation in the world’s largest economy.
Further signs of easing inflation could bolster expectations of a rate cut, especially given signs of economic weakness, but a much weaker-than-expected inflation reading could spook investors and revive recession fears that have been lurking for months.
General Motors rises on share buyback plan, Eli Lilly rises on Alzheimer’s drug breakthrough
General Motors (NYSE:) shares rose 1.4% after the automaker’s board approved a new $6 billion share repurchase plan.
Eli Lilly (NYSE:) shares traded above flat after the company’s Alzheimer’s disease drug donanemab received unanimous approval from an FDA committee.
(Peter Nurse contributed to this article)
