Stock futures were relatively flat Tuesday night as investors awaited the Federal Reserve’s interest rate decision and May’s consumer inflation data. Futures tied to the Dow Jones Industrial Average slipped 0.02%, while S&P 500 futures increased by 0.04% and Nasdaq 100 futures rose by 0.1%. Oracle saw a significant jump of 9% in extended trading, following the announcement of new cloud deals with Google and OpenAI.
During Tuesday’s trading session, Apple’s announcement of its push into artificial intelligence at its developer conference helped lift the S&P 500 and the Nasdaq Composite to new closing highs. The Dow, however, experienced a decline of 0.31%. Investors are now turning their attention to the conclusion of the Fed’s two-day policy meeting, where a rate policy decision will be made and a press conference with Fed Chair Jerome Powell will follow.
While it is expected that the Fed will maintain its benchmark overnight borrowing rate between 5.25%-5.5%, investors will be looking for updates to the Summary of Economic Projections, which could provide insight into the future path of policy. There is growing concern among investors that a strong jobs report and persistent inflation may lead to a higher-for-longer interest rate environment. Fed Chair Jerome Powell’s comments regarding the labor market will be closely watched, as indications of deterioration could prompt rate easing.
In addition to the Fed’s decision, May’s consumer price index data is set to be released on Wednesday morning. Forecasts suggest a 0.1% increase from April and a 3.4% rise on a year-over-year basis. This data will provide further insight into inflation trends and could influence future Fed policy decisions. Overall, investors are closely monitoring economic indicators and central bank actions to gauge the direction of the market.
Market participants are eager for any mention of concerns regarding the labor market in the Fed’s statement, dot plot, or Powell’s comments. Powell’s remarks on potential rate easing in response to labor market deterioration have heightened investor sensitivity to any signals from the central bank. The Fed’s update on economic projections, combined with CPI data, will provide key information for investors navigating uncertainties surrounding interest rates and inflation. The market’s reaction to these developments will influence asset prices and overall market sentiment.
