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Wall Street rallied on Wednesday, with the S&P 500 notching a
record high after U.S. central bankers kept borrowing costs
unchanged and indicated they still expect to ease interest rates
by three-quarters of a percentage point by the end of 2024.
"The Federal Open Market Committee (FOMC) meeting concluded on a
more dovish tone than even the optimistic marketplace had
anticipated," said Sam Stovall, chief investment strategist at
CFRA.
"The Street went into this meeting expecting three cuts this
year, with the first coming by mid-year, and that is what
appears to have been communicated, as Chair Powell did not push
back against market expectations for a rate cut in June."
Inflation reports "haven't really changed the overall story,
which is that of inflation moving down gradually on a sometimes
bumpy road to 2%," Powell said in a press conference after the
policy meeting.
The CME FedWatch tool showed the market is now pricing in a 70%
chance of a Fed rate cut in June, compared with around 56% at
the beginning of the week.
UBS Global Research said that it now expects the first cut in
June, compared with its prior forecast of a cut in May.
Chipmaker Micron Technology jumped 17.7% in trading before the
bell after posting a surprise quarterly profit and forecasting
third-quarter revenue above estimates.
Peers such as Intel and Nvidia added more than 1% each, while
Western Digital jumped 6.9%.
Separately, TD Cowen upgraded Broadcom's rating to "outperform".
The stock was up 2.7%.
Investors awaited data on weekly jobless claims and business
activity due later in the day.
At 7:00 a.m. ET, Dow e-minis were up 85 points, or 0.21%, S&P
500 e-minis were up 17 points, or 0.32%, and Nasdaq 100 e-minis
were up 127.75 points, or 0.69%.
Most rate-sensitive megacap growth and technology stocks also
advanced in premarket trading.
Apple, however, fell 1.2% on a report that the U.S. Department
of Justice is preparing to sue the company as soon as Thursday
for allegedly violating antitrust laws.
Reddit's shares are expected to start trading on the New York
Stock Exchange later in the day under the ticker 'RDDT' after
the social media platform priced its initial public offering at
the top end of its targeted range of $31 to $34 per share.
(Reporting by Bansari Mayur Kamdar and Shashwat Chauhan in
Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)
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