S&P 500 give up some gains, but record close in sight despite hawkish Fed outlook By
— The S&P 500 eased slightly after hitting record highs Wednesday as the Federal Reserve signaled just one rate cut this year as data showing inflation cooler than expected in May boosted sentiment.
At 15:36 ET (19:36 GMT), rose 0.8% after hitting a record of 5,447.02 and rose 1.5%, the fell 60 points, or 0.2%,
Fed sees just one cut for 2024; CPI in May cools more than expected
The Federal Reserve kept on Wednesday, but now sees just one rate cut for the year, as inflation is expected to trend higher than previously expected.
Fed members now see the benchmark rate falling to 5.1% this year, suggesting just one rate cut in 2024, compared with a prior estimate in March for three cuts. In 2025, Fed members see the rates falling to 4.1%, up from a prior forecast for 3.9%, before eventually declining to 3.1% in 2026.
“The shifts in the projections of the Fed’s SEP are more hawkish than we anticipated,” Economists at Jefferies said in a Wednesday note following the decision.
The decision arrived on the heels of data showing U.S. consumer prices increased by less than expected on an annualized basis in May, as the consumer price index rose by 3.3% last month, decelerating slightly from 3.4% in April. Month-on-month, the reading slowed to 0.0% from 0.3%.
Oracle surges on AI partnerships
The tech market remained in focus Wednesday, with Oracle (NYSE:) stock rose 13% after the computer technology group announced two new partnerships with ChatGPT-maker OpenAI and Google (NASDAQ:) Cloud in a bid to extend the reach of its AI infrastructure, while also unveiling a healthy forecast for revenue growth in its 2025 fiscal year.
Elsewhere, Rubrik (NYSE:) stock fell 8% despite the cloud data management company delivering guidance and first-quarter results that topped expectations.
Nio (NYSE:) ADRs was flat after the European Union said it would slap higher tariffs on Chinese electric vehicle imports, of up to 38%.
Crude boosted by demand optimism
Crude prices rose Wednesday, boosted by the U.S. inflation data as well as upbeat views of global demand.
This overshadowed a bearish monthly report from the International Energy Agency, in which the Paris-based agency cut its global crude demand growth forecast for 2024 by 100,000 barrels per day to 960,000 bpd, citing sluggish consumption in developed countries.
Data from the report from the U.S. Energy Information Administration released Wednesday, showed an unexpected rise in U.S. oil inventories, muddying hopes that U.S. fuel consumption was picking up with the onset of the travel-heavy summer season.
(Peter Nurse, Ambar Warrick contributed to this article.)