Dow jumps more than 100 points, S&P 500 hits record on cool inflation data as Fed decision looms: Live updates – CNBC

Wednesday’s early morning rally was a broad-based one, with most stocks listed on the NYSE rising. As of 10:30 a.m. ET, there were at least seven advancers for every decliner on the NYSE. Overall, 2,337 stocks rose, while only 322 decliners.

Fred Imbert

Bitcoin prices rose more than 3% on Wednesday morning after the Labor Department reported that the Consumer Price Index was flat in May.

“We can see from the market’s reaction today that any dip in CPI and inflation leads the market to believe that interest rates will be lowered in the near future,” said Chris Klein, co-founder and chief operating officer of BitcoinIRA. “This expectation is driving up the price of all assets, including Bitcoin.”

“However, these moves offset last week’s pullback,” he added. “We expect Bitcoin’s real surge to come later this summer as the delayed effects of the halving take hold.”

Crypto stocks rose along with Bitcoin and the broader risk asset market. Coinbase rose 4% and MicroStrategy rose 7%. Miner stocks also generally rose, with Riot Platforms and CleanSpark each posting gains of more than 6%.

Tanaya Maciel

According to Wolf Research, the May Consumer Price Index figure gave Federal Reserve Chairman Jerome Powell “permission” to signal two interest rate cuts this year.

“We expect the governor to maintain a very dovish stance,” chief investment strategist Chris Senyek told clients in a Wednesday note ahead of the Fed’s 2 p.m. meeting. “This should favor the MAG7 and secular growth stocks in general, as economic data remains volatile for the remainder of the summer.”

The May CPI data was flat from the previous month, rising 3.3% year-on-year. The index is expected to have increased 0.1% from April, equating to a 3.4% increase in the annual total.

He said the weaker-than-expected inflation reading “keeps the ‘Fed put’ firmly in place,” meaning the market still expects the central bank to “step in and cut rates at the first signs of real economic weakness.”

– Sean Conlon

Andrew Left’s Citron Research said it had stopped shorting meme stocks after video game retailer GameStop Corp. took advantage of a recent trading frenzy to raise billions of dollars in stock sales.

“Not because we believe the company’s fundamentals will turn around, but with $4 billion in the bank we have more than enough financial muscle to appease our cult-like shareholders,” the company said in a Wednesday X post.

Citron shorted the stock again when meme stock champion and trader Roaring Kitty reemerged online. More than three years ago, the short seller had stopped short selling altogether after taking losses on bearish bets on GameStop shares during a retail trading frenzy.

Yun Lee

The slowing inflation report is boosting confidence that the first rate cut from the Federal Reserve could come sooner rather than later, according to Charlie Ripley, senior investment strategist at Allianz Investment Management.

“Inflation data due out of the Fed later today should provide renewed confidence for Chairman Powell and bolster the confidence of his fellow voting members,” Ripley wrote. “More importantly, looking ahead, the distance between now and the first rate cut of the cycle appears to be rapidly approaching.”

Sarah Min

Stocks rose on Wednesday after the May inflation report came in lower than expected.

The S&P 500 rose 0.9%, and the Nasdaq Composite rose 1.1%, with both indexes opening at record highs. The Dow Jones Industrial Average rose 334 points, or 0.9%,.

— Lisa Kailai Han

Treasury yields fell sharply on Wednesday morning after the Consumer Price Index (CPI) report showed inflation was unchanged in May from the previous month.

The yield on the 10-year Treasury note fell 11 basis points to 4.293%. The yield on the two-year note fell 13 basis points to 4.701%.

Yields move in the opposite direction to bond prices, and one basis point is equal to 0.01 percentage point.

The move could be a sign that traders believe the cooling inflation report makes it more likely the Federal Reserve will cut interest rates this year.

Jesse Pound

The weaker-than-expected consumer price index sent stock futures higher on hopes that inflationary pressures are easing.

The May CPI was flat from the previous month and up 3.3% from a year ago. Economists surveyed by Dow Jones had expected the CPI to rise 0.1% from the previous month and 3.4% from a year ago.

Core CPI, which excludes food and energy prices, also came in below expectations, rising just 0.2% from the previous month. Core prices were expected to rise 0.3%.

Fred Imbert

Here are some of the stocks that made the biggest moves before the close.

• Paramount Global — Shares fell 3.3% after National Amusements called off talks with Skydance about a proposed merger with Paramount, according to CNBC’s David Faber.
• Oracle — Shares rose 7.4% after the cloud services company announced deals with Google and OpenAI. Oracle will make its databases available on Google Cloud starting in November, and it also plans to partner with Microsoft and OpenAI for additional computing power.
• Birkenstock — Shares fell 2.6% after Goldman Sachs downgraded the company to neutral from buy. The bank said the company’s shares, up about 21% this year, are outperforming other luxury brands.

If you want to know more stocks moving pre-market, read the full story here.

Michelle Fox

Investors are largely in agreement that the Federal Reserve will keep interest rates unchanged on Wednesday, but it will still be a pivotal day in determining the short-term direction of markets, according to UBS.

The bank wrote that investors will be looking for evidence that costs and inflation are falling, starting with the morning release of the Consumer Price Index for May.

But “the most tangible indicator for investors will be the quarterly Dot Plot, which graphs Fed officials’ interest rate forecasts,” the bank said. “Having narrowly avoided a single rate cut, the Dot Plot is likely to add to anxiety as it suggests policy will become more hawkish.”

UBS still expects the U.S. central bank to cut interest rates twice this year, with the first cut coming in September.

— Lisa Kailai Han

Total mortgage applications rose 16% from the previous week as interest rates fell slightly, according to data from the Mortgage Bankers Association.

“The decline in interest rates earlier this week meant a big increase in refinancing activity, especially for VA loan borrowers, who jumped at the chance to get a lower rate,” said Mike Fratantoni, MBA senior vice president and chief economist.

— Fred Imbert and Diana Olick

European markets opened higher on Wednesday, with most sectors starting the day in the positive.

The pan-European Stoxx 600 index was up 0.35% as of 8:14 a.m. London time, with banking stocks leading the gains and last up 0.84%, while auto stocks were down 0.78%.

Britain’s FTSE 100 was last up 0.56%, France’s CAC 40 was up 0.35% and Germany’s DAX was up 0.39%.

Sophie Kiderlin

DoubleLine Capital Chief Executive Jeffrey Gundlach believes the Fed’s so-called dot plot projects just two rate cuts this year, he said during an investor webcast after the close on Tuesday.

This is lower than previous expectations, which predicted three rate cuts in 2024.

The dot plot shows where the 19 FOMC members, both voting and non-voting, expect interest rates to go through the end of the year and into 2026 and beyond.

Prominent bond investors have previously said they don’t expect more than one rate cut this year as the Fed continues to fight inflation.

Yun Lee

Let’s take a look at some companies that are garnering attention in after-hours trading.

• Oracle — The technology company’s shares rose about 9% after it announced cloud deals with Google and OpenAI, despite reporting weaker-than-expected fourth-quarter earnings. Oracle posted adjusted earnings per share of $1.63 on revenue of $14.29 billion, while analysts were expecting earnings per share of $1.65 on revenue of $14.55 billion.
• Rubrik — Shares of the cloud data management company rose 1.4% after first-quarter revenue beat expectations. Rubrik reported revenue of $187 million for the period, while analysts surveyed by LSEG were expecting $172 million.
• RENTOKIL INITIAL — Shares in Terminix parent company Rentokil rose about 7.5% after Nelson Peltz’s Trian Partners confirmed it had taken a significant stake in pest control giant Rentokil and is now a top 10 shareholder in the company.

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Pia Singh

Stock futures were down slightly just after 6pm ET, with S&P 500 futures and Nasdaq 100 futures down 0.05% and 0.09%, respectively, while Dow futures were just below flat.

Pia Singh