Indexes pare gains slightly after Fed statement

Indexes pare gains slightly after Fed statement

By Caroline Valetkevitch

NEW YORK (Reuters) -The S&P 500 and Nasdaq trimmed gains slightly and the Dow turned a bit lower after the Federal Reserve projected only a single quarter-point reduction for the year.

Also, the U.S. central bank in its policy announcement left interest rates unchanged, as expected.

“The Fed is acting like a CEO, sandbagging rate cut expectations down to one or two cuts but likely going to beat them later this year with two or more,” said Gene Goldman, chief investment officer at Cetera Investment Management in Los Angeles.

The Dow Jones Industrial Average fell 7.4 points, or 0.02%, to 38,740.02, the S&P 500 gained 51.47 points, or 0.96%, at 5,426.79 and the Nasdaq Composite added 293.01 points, or 1.69%, at 17,636.56.

Stocks were already rallying earlier in the day after a Labor Department report showed the Consumer Price Index was unchanged on a monthly basis in May, when it was expected to rise 0.1%. On an annual basis, inflation rose 3.3%, less than economists’ expectation of a 3.4% increase.

After the data, traders boosted bets that the Fed will cut rates by September. Traders also added to bets on a second Fed rate cut by December.

Also helping stocks, Oracle shares jumped after forecasting double-digit revenue in fiscal 2025 after the bell on Tuesday.

Advancing issues outnumbered decliners on the NYSE by a 4.21-to-1 ratio; on Nasdaq, a 2.26-to-1 ratio favored advancers.

The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 95 new highs and 57 new lows.

(Reporting by Caroline Valetkevitch in New York; additional reporting by Sinead Carew in New York and Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Richard Chang)

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