The S&P 500 was still up after hitting a record high. The central bank had previously projected three interest rate cuts in 2024.
The excitement in the Dow Jones Industrial Average and other stock indexes began to wane on Wednesday afternoon after the Federal Reserve announced no change in interest rates despite cooling inflation. The Fed also indicated that there may only be one interest rate cut this year instead of the three cuts projected in December 2023.
On Wednesday, Fed officials said there has been “modest progress” toward its 2% inflation target, maintaining interest rates at 5.25% to 5.50%. The Federal Reserve Chair Jerome Powell mentioned in the press conference that the central bank is not yet confident enough to reduce rates, even though inflation is slowing down.
The news disappointed investors in the afternoon, who started the day excited about cooling inflation. The Dow initially surged more than 350 points in the morning, while the S&P 500 reached a new record high in the morning.
The latest Consumer Price Index data showed inflation cooling. The CPI rose 3.3% year-over-year in May, according to data released by the Bureau of Labor Statistics, lower than the 3.4% expected increase. Moreover, the Consumer Price Index for All Urban Consumers (CPI-U) remained unchanged in May after increasing by 0.3% in April. And the so-called core CPI, which excludes more volatile energy and food prices, rose 3.4% last month, compared to an expected increase of 3.5% in May.
Following the news of the inflation slowdown, the 10-year Treasury yield dropped to 4.26%, its lowest level since April 1. As the market closed, the Dow dropped 25 points, or 0.09%, to 38,712. The S&P 500 rose almost 0.8%, while the Nasdaq $NDAQ jumped 1.5%.
Apple $AAPL reclaimed its spot as the world’s most valuable company on Wednesday. In intraday trading Wednesday, Apple’s market capitalization reached $3.3 trillion, just ahead of Microsoft $MSFT’s $3.25 trillion. Apple’s stock reached its all-time high, with an increase of over 2.8%, trading at around $213, as the market closed.
Since launching its AI initiative Apple Intelligence during its Worldwide Developers Conference on Monday, the company’s stock price has climbed to a new high.
Apple’s had a year of ups and downs. The company faced scrutiny from antitrust regulators at home and abroad. Its iPhone sales struggled in China. Skeptics doubted that it could catch up to rivals on AI. And last week, Nvidia $NVDA briefly unseated Apple as the world’s second-most valuable company.
On the eve of Tesla $TSLA’s annual meeting — where shareholders will either rebuke or reward CEO Elon Musk – the stock was among the best-performing stocks on the Nasdaq. The shares were trading at $177 with 3.8% growth as the day ended. Meanwhile, ARK Investment Management’s Cathie Wood has said Tesla’s robotaxis could account for 90% of the company’s business. By 2029, Tesla bull Cathie Wood’s ARK expects value to climb more than 1,400% to $2,600 per share, according to a new report from the firm.
In its latest earnings report, the company mentioned $14.29 billion in revenue for the quarter, which was a 3% increase compared to the previous year. This fell short of the $14.55 billion expected by analysts. Additionally, the company’s adjusted earnings per share were $1.63, slightly below the analysts’ expected $1.65.
At the time of the closing bell, the stock was trading at around $140, reaching a new 52-week high.
– Laura Bratton and William Gavin contributed to this article
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