US stocks drift ahead of the Fed’s announcement on interest rates
US stock markets showed mixed movements on Wednesday ahead of the Federal Reserve’s interest rate announcement, with the S&P 500 and Nasdaq rising slightly while AI-related stocks like Jabil, Broadcom, and Applied Materials surged. Investors are closely watching Fed Chair Kevin Warsh’s projections on future rate adjustments amid expectations of no immediate change, though oil price volatility from the US-Iran deal adds uncertainty.
US stock markets drifted Wednesday as traders awaited the Federal Reserve’s afternoon decision on interest rates. The S&P 500 rose 0.2%, while the Dow Jones Industrial Average climbed 240 points (0.5%) and the Nasdaq increased 0.2%. AI-linked stocks led gains, with Jabil up 5.2% after beating earnings forecasts, citing strong AI infrastructure demand. Broadcom rose 4.4% and Applied Materials jumped 8.6%, though these stocks have fluctuated sharply amid AI hype concerns. SpaceX fell 2.3%, erasing early gains and potentially marking its first loss since its stock market debut last week. Outside tech, La-Z-Boy surged 21.4% after reporting stronger-than-expected quarterly profits, driven by new store revenue despite cautious optimism about broader sales. A May retail revenue report showed faster-than-expected growth, offering hope for consumer-driven economic support, though high inflation continues to weigh on shoppers’ financial confidence. The Fed’s decision, widely expected to hold rates steady, will focus on future projections and remarks from Chair Kevin Warsh. Traders had previously priced in potential rate hikes due to inflation fears, but oil prices have eased to $80 per barrel following a US-Iran deal to reopen the Strait of Hormuz, easing supply concerns. The Fed’s stance remains uncertain, with bets split between rate cuts, stability, or hikes. President Donald Trump has publicly pushed for cuts, while markets lean toward no change. The outcome hinges on Fed officials’ outlook and Warsh’s first policy remarks.
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