US stocks surged on Wednesday following a positive reading on inflation, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posting gains. The Consumer Price Index (CPI) showed that consumer prices increased less than expected in May, easing concerns about inflation. This data comes just hours before a Federal Reserve meeting where interest rates will be discussed.
The S&P 500 rose more than 1.2%, the Nasdaq Composite jumped nearly 1.8%, and the Dow Jones Industrial Average increased by about 0.5%. The 10-Year Treasury yield also fell to its lowest level since April, prompting a rally in interest rate-sensitive areas of the market.
Market expectations for Fed rate cuts this year shifted after the CPI data was released, with a higher chance now that the Federal Reserve will begin cutting rates by its September meeting. Investors will be closely watching the Fed’s updated economic projections and any signals on future rate cuts.
In other news, Tesla stock rose more than 4% after Ark Invest released research projecting that Tesla could reach $2,600 per share by 2029. CEO Elon Musk called the target achievable, leading into a crucial shareholder vote on his pay package.
Apple also reclaimed its spot as the largest stock in the world, surpassing Microsoft in market cap. The iPhone maker’s stock gained nearly 4% on Wednesday morning, driven by positive sentiment around its AI platform, Apple Intelligence.
Overall, the positive inflation data and market reactions set a bullish tone for the day, with investors closely monitoring the Fed meeting and other market-moving events. Stay tuned for more updates as the day unfolds.
