The main indexes were choppy Tuesday as folks looked ahead to key events on Wednesday's economic calendar – namely, the release of the May Consumer Price Index (CPI) and the conclusion of the Federal Reserve's policy meeting.
As for single stocks, Apple (AAPL) made a beeline higher as Wall Street weighed in on the tech giant's Worldwide Developers Conference (WWDC) news.
Investors are keyed in on tomorrow's main events. First up is the May inflation data, which will be released at 8:30 am Eastern time. The Fed, meanwhile, will release its policy statement at 2 pm along with its Summary of Economic Projections, or dot plot, which includes central bankers' expectations for where the federal funds rate will be over the next few years.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In March, the Fed projected three quarter-point rate cuts by year's end, though the odds of this happening have fallen dramatically amid stronger-than-expected economic data. Now, there's no clear answer to the question "When will the Fed cut rates?"
"Cutting rates too quickly could stoke inflationary pressures so we would expect the Fed to move very cautiously," says Victoria Fernandez, chief market strategist at Crossmark Global Investments. "I'm not sure it matters that much as long as the market knows cuts are coming in the next six months."
According to CME Group's FedWatch Tool, futures traders are currently pricing in a roughly 47% chance the first quarter-point rate cut will come in September or November, with a 39% probability it won't happen until December.
Indeed, NinjaTrader analyst Tom Schneider, CMT, says that if the headline CPI reading remains at or above 3.4% on an annual basis, "the Fed will be fine with keeping rates unchanged for a bit longer." And Schneider adds that if it stays there, the first rate cut could even be pushed back into 2025.
Apple hits record high on day two of WWDC 2024
Apple shares surged 7.3% as several analysts chimed in on the artificial intelligence (AI) initiatives the tech giant has unveiled at its annual WWDC. These include the Apple Intelligence generative AI offerings for its devices and the company's new ChatGPT partnership with OpenAI.
"The impressive list of AI features and their deep integration into iOS removes concerns of Apple lagging behind other platforms on AI development," said Oppenheimer analyst Martin Yang, who has an Outperform (Buy) rating on the Dow Jones stock.
Wedbush analyst Daniel Ives is also upbeat about Apple's WWDC news. "We believe Apple's AI strategy will leverage its golden installed base around personalization and large-language models on the phone that should change the growth trajectory of Cupertino and spur an AI-driven iPhone upgrade cycle starting with iPhone 16," Ives wrote in a note.
Affirm stock gets a much-needed Apple boost
In other Apple news, a regulatory filing from Affirm Holdings (AFRM) released Tuesday showed the buy-now-pay-later (BNPL) firm's payment products will be available to Apple Pay users later this year.
"The news is a big positive for AFRM, especially since the stock traded down several times in the past when Apple announced its entry into BNPL," Mizuho Securities analyst Dan Dolev (Buy) says, adding that "Affirm's strong brand and sophisticated underwriting technology have a moat that Apple likely could not replicate on its own."
AFRM surged 11% on the news, though the struggling fintech stock remains 31% lower for the year to date.
As for the main indexes, the Nasdaq Composite (+0.9% at 17,343) and the S&P 500 (+0.3% at 5,375) notched new record closing highs, while the Dow Jones Industrial Average slipped 0.3% to 38,747.
Related content
- Earnings Calendar and Analysis for This Week
- Should You Invest in Nvidia After Its Stock Split?
- Recession-Proof Stocks: The Best Kinds of Stocks To Buy for a Recession
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read This
Roth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the Case
A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
-
Quick Question: Are You Planning for a 20-Year Retirement or a 30-Year Retirement?You probably should be planning for a much longer retirement than you are. To avoid running out of retirement savings, you really need to make a plan.
