1. U.S. inflation rose 2.4% in May, meeting expectations. 2. Core inflation at 2.8% was below forecasts of 2.9%. 3. Weaker CPI data may lead to a Fed rate cut in September. 4. Tariff effects on prices remain uncertain as companies hesitate. 5. S&P 500 finished up 0.3% amid these economic signals.
While inflation did rise, the weaker core inflation may signal Fed rate cuts, historically boosting equities. For example, rate cuts in 2019 led to a surge in the S&P 500.
The article discusses critical economic indicators, influencing both investor sentiment and Federal Reserve policy. A shift towards lower interest rates can significantly impact S&P 500 performance.
The immediate focus is on potential Fed actions due to May's inflation data, which could influence market trends quickly, similar to the swift market reactions observed during the initial COVID-19 stimulus discussions.