Investing.com — The S&P 500 closed above 5,400 on Wednesday after the Fed’s prospects for fewer cuts were overshadowed by data showing inflation cooled more than expected in May, fueling optimism that the disinflation trend remains intact.
At 4:00 PM ET (20:00 GMT), it rose 0.8% to a record 5,420, after hitting an intraday record of 5,447.02 and rose 1.5% to the third record in a row , while it fell by 35 points, or 0.1%.
The Fed sees only one cut before 2024; CPI in May cools more than expected
The Federal Reserve kept interest rates on hold on Wednesday, but now sees only one rate cut this year as inflation is expected to be higher than previously expected.
Fed members now see rates falling to 5.1% this year, suggesting just one rate cut in 2024, down from an earlier estimate in March of three cuts. In 2025, Fed members see interest rates falling to 4.1%, down from a previous forecast of 3.9%, before finally falling to 3.1% in 2026.
“The shifts in the Fed’s SEP projections are more aggressive than we expected,” Jefferies economists said in a note on Wednesday following the decision.
The decision followed data showing that U.S. consumer prices rose less than expected year-over-year in May, as the consumer price index rose 3.3% last month, slowing slightly from April’s 3.4%. Month-on-month the value fell from 0.3% to 0.0%.
Oracle expands AI partnerships
The technology market remained in focus on Wednesday, with shares of Oracle (NYSE:) rising 13% after the computer technology group announced two new partnerships with ChatGPT maker OpenAI and Google (NASDAQ:) Cloud in an effort to expand the reach of its AI infrastructure , while also revealing a healthy forecast for fiscal 2025 revenue growth.
Elsewhere, Rubric (NYSE:) Shares fell 8% despite the cloud data management company providing guidance and first-quarter results that beat expectations.
Apple Inc (NASDAQ:), meanwhile, continued to raise AI optimism as iPhone maker Microsoft (NASDAQ:) briefly took Microsoft’s (NASDAQ:) crown as the most valuable company by market cap, a day after jumping 7% when Wall Street cheered his win. plans to dabble in AI.
gives up some gains, but crypto stocks end higher
Bitcoin gave up its gains after the Fed’s decision and aggressive outlook, but cryptocurrency-related stocks came along for the ride Coinbase worldwide Inc (NASDAQ:), MicroStrategy Incorporated (NASDAQ:) and Marathon Digital Holdings Inc (NASDAQ:) higher.
(Peter Nurse, Ambar Warrick contributed to this article.)
