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.
Sign up for Kiplinger’s Free E-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
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
