Stock market today: S&P 500, Nasdaq soar to fresh records after inflation cools and Fed sees improving outlook
What were the closing figures for the S&P 500 and Nasdaq following the Federal Reserve's announcement, and how did these compare to previous records?
The S&P 500 and Nasdaq indexes hit record closing highs after the Federal Reserve's announcement4. The S&P 500 notched a record close for the 28th time this year, rising about 0.9% and closing above 5,400. The tech-heavy Nasdaq Composite rose about 1.5%, also adding to a record close from the prior day. These closing figures marked a positive reaction from investors to the Federal Reserve's decision to hold interest rates steady and the cooler-than-expected inflation data.
How did the Federal Reserve adjust its interest rate projections for the upcoming years based on the latest economic data?
The Federal Reserve adjusted its interest rate projections for the upcoming years based on the latest economic data by projecting just one rate cut this year, down from three in March. Fed officials see the fed funds rate peaking at 5.1% in 2024, suggesting the Fed will cut rates by 0.25%. This indicates that the central bank expects to cut interest rates one time in 2024. The updated projections suggest the Federal Reserve will maintain a "higher for longer" policy stance as the central bank works to bring inflation back down to its 2% target.
What specific inflation measures were reported in the Consumer Price Index (CPI) for May, and how did they compare to April's figures?
The Consumer Price Index (CPI) for May showed that consumer prices increased less than expected. The CPI was flat over the previous month and increased by 3.3% over the prior year in May, which is a deceleration from April's 3.4%. On a "core" basis, which strips out the more volatile costs of food and gas, prices in May climbed 0.2% over the prior month and 3.4% over last year, which is cooler than April's data. Both measures came in lower than economist expectations.