The S&P 500 and Nasdaq indexes posted record closes for the third straight day on Wednesday after US consumer price data came in weaker than expected, but the indexes closed below daily highs as the Federal Reserve forecast only an interest rate cut this year.
The Fed’s March projections included three reductions of 0.25 percentage points. The US central bank, in a statement at the end of its June 11-12 meeting, left its benchmark interest rate unchanged at 5.25%-5.5%, as expected.
Stocks were choppy following the news and press conference with Fed Chair Jerome Powell, with the S&P 500 and Nasdaq late trimming their gains and the Dow Jones closing almost unchanged.
Stocks opened higher after the U.S. Department of Labor reported that the U.S. consumer price index was unexpectedly unchanged in May due to lower gasoline prices.
“The price index number was certainly weaker than estimates and boosted optimism earlier in the day, but that was only half the menu today,” said Michael James, managing director of equity trading at Wedbush Securities .
James said he expects the market to end up weaker after the Fed’s update, noting that “comments were harsh and rate cut expectations were reduced from three to one.”
The Dow Jones closed with a negative change of 0.09%, at 38,712.21 points. The S&P 500 index rose 0.85% to 5,421.03 points. The Nasdaq technology index advanced 1.53% to 17,608.44 points.
Shortly after the inflation report, investors increased bets on a Fed rate cut in September and another in December.
Source: Terra
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