Stock indexes mostly higher with lower CPI raising rate cut hopes

From Nasdaq: 2024-06-12 18:10:40

Stock indexes ended mixed on Wednesday, with S&P 500 and Nasdaq 100 reaching record highs as bond yields fell. US May CPI report showed a lower than expected increase, raising expectations for interest rate cuts. The FOMC projected one 25 bp rate cut this year, sending Dow into negative territory and tempering gains.

May CPI unexpectedly eased to +3.3% y/y, weaker than expected. Weekly US MBA mortgage applications rose +15.6%. The FOMC kept rates unchanged but lowered projected rate cuts. Powell stated inflation is still high but has eased, signaling policy remains restrictive for now.

T-notes rallied, hitting a 2-1/4 month low of 4.248% after May CPI report. The 10-year breakeven inflation rate fell to a 4-month low. ECB and Fed signal cautious approach to rate cuts. US stock movers included Oracle, Apple, and Homebuilding stocks gaining, while defensive consumer stocks and energy stocks fell. Earnings reports due on 6/13/2024.



Read more at Nasdaq: Stocks Finish Mostly Higher as Tame CPI Bolsters Fed Rate Cut Hopes