The Market News Today: Fed Holds Rates, Signals Only One Cut in 2024

Fed Leaves Rates Unchanged at 5.25%-5.5%, Forecasts One Cut in 2024

The Federal Reserve maintained its interest rates at 5.25%-5.5%, revising its forecast to a single rate cut in 2024. Chairman Jerome Powell emphasized the need for more data before easing policy, noting progress towards the 2% inflation target but cautioning that current measures are still necessary to achieve desired economic conditions. Despite recent improvements, the Fed remains committed to its restrictive stance to ensure sustained inflation control.

S&P 500 Hits Record High, Futures Rise After Fed Decision

S&P 500 futures climbed Thursday as the index closed above 5,400 for the first time, driven by the Fed’s interest rate decision and cooler-than-expected May inflation data. Both the S&P 500 and Nasdaq reached all-time highs, with the S&P 500 up 0.85% and Nasdaq 1.53%. Broadcom shares surged 14% after strong earnings and a stock split announcement. Investors are optimistic about easing inflation and future rate cuts.

Broadcom Beats Earnings Estimates, Announces 10-for-1 Stock Split

Broadcom reported strong fiscal Q2 earnings, surpassing analysts’ estimates with an EPS of $10.96 versus $10.84 expected and revenue of $12.49 billion versus $12.03 billion expected. The company announced a 10-for-1 stock split, effective July 15, leading to a 10% rise in extended trading. Broadcom’s AI-related sales contributed $3.1 billion, and its fiscal 2024 sales forecast increased to $51 billion. The VMware acquisition also boosted sales growth by 43% year-over-year.

Apple Reclaims Most Valuable Company Title from Microsoft

Apple briefly reclaimed its status as the world’s most valuable company, surpassing Microsoft with a market cap of $3.3 trillion following its AI push announcement. Despite Apple’s midday lead, Microsoft closed the trading day with a slight edge at $3.2 trillion. Major financial institutions are optimistic about Apple’s AI advancements, predicting a boost in iPhone sales. This investor enthusiasm reflects confidence in Apple’s potential to leverage AI technology for future growth.

Gold, Oil Prices Fall as Fed Delays Rate Cuts to December

Gold prices fell after the Federal Reserve announced only one rate cut for later this year, despite cooling inflation. The Fed’s decision to potentially delay rate cuts until December contributed to the decline. Oil prices also dropped, influenced by the Fed’s stance and rising U.S. crude stockpiles. Analysts expect gold to trade choppily until there is more clarity on rate cuts, while oil markets react to mixed reports from the IEA and OPEC+ and ongoing geopolitical tensions.