Key points:

  • The S&P 500 and Nasdaq indices hit record closing highs for the third day in a row thanks to low inflation.
  • Growth slowed due to the Fed’s forecast of one rate cut this year.
  • Oracle shares rose 13.3% after forecasting double-digit revenue growth.

The S&P 500 and Nasdaq posted record closing highs for the third day in a row, helped by lower-than-expected inflation data. But gains slowed and indexes closed below their daily highs as investors reacted to the Federal Reserve’s forecast that there will be only one interest rate cut this year.

The Dow Jones Industrial Average fell 35.21 points, or 0.09%, to 38,712.21. The S&P 500 rose 45.71 points, or 0.85%, to 5,421.03. The Nasdaq Composite rose 264.89 points, or 1.53%, to 17,608.44.

Traders monitored the CPI and the results of the Fed meeting

As expected, the US Federal Reserve did not change the interest rate at its meeting on June 11-12, leaving it at the same level. This decision coincides with the Fed’s March forecasts, which included three rate hikes of 0.25% during the year.

The market reacted to the news with mixed reactions. Stocks have been volatile since the Fed’s announcement and the press conference with Chairman Jerome Powell. The S&P 500 and Nasdaq rose as trading closed, while the Dow Jones ended the day virtually unchanged.

The rise came after the US Labor Department reported that the consumer price index unexpectedly remained unchanged in May, due to falling gasoline prices.

Analysts had expected a weaker end to the day after the Fed meeting, noting the hawkish tone of Powell’s comments and the reduction in the number of rate cuts expected from three to one.

Oracle stock continues to rise

Oracle shares surged 13.3%, leading the market’s gains after the company on Tuesday released guidance for double-digit revenue growth in fiscal 2025.

Apple shares, continuing their ascent that began on Tuesday, rose 2.9%, briefly returning the company to the status of the most valuable in the world, displacing Microsoft from the top of the pedestal.

Trading volume on US exchanges was 11.80 billion shares, below the average for the last 20 trading days (12.74 billion).

Oracle’s growth is driven by the aggressive development of its cloud division, which is expected to become a growth driver by providing companies with cloud computing power and storage. However, Oracle will have to withstand competition from Alphabet, Microsoft and

Oracle’s cloud infrastructure, positioned by competitors as a more affordable option, has already attracted venture capital-funded generative AI clients, including Elon Musk’s xAI.

On Tuesday, Oracle announced a partnership with ChatGPT developer OpenAI and Google Cloud to expand native cloud infrastructure capabilities for its customers. As part of this partnership, OpenAI will be able to use the Microsoft Azure platform on Oracle infrastructure for some use cases, and OpenAI’s new language learning models will be trained on a supercomputer built jointly with Microsoft.