U.S. Stock Futures Edge Lower Ahead of Key Fed Decision and Inflation Data
U.S. stock futures dipped slightly on Tuesday as investors remained cautious ahead of a significant Federal Reserve policy decision and upcoming inflation reports. On Monday, the S&P 500 and Nasdaq Composite reached record closing highs, driven partly by Nvidia’s anticipated 10-for-one stock split, which raised speculation about its potential inclusion in the Dow Jones Industrial Average.
Investors are now focusing on Wednesday, when the Federal Reserve will conclude its two-day policy meeting and the U.S. Bureau of Labor Statistics will release the May consumer price index, a key measure of inflation in the U.S.
Apple Partners with OpenAI to Enhance AI Capabilities
Apple has announced a new partnership with OpenAI to integrate the ChatGPT chatbot into its products. This collaboration, unveiled at Apple’s annual developers conference, aims to bolster Apple’s artificial intelligence offerings. CEO Tim Cook introduced the “Apple Intelligence” system, designed to improve the Siri voice assistant and deliver more personalized features.
Despite the announcement, Apple shares dropped by 1.9% on Monday, reflecting investor disappointment over the lack of a groundbreaking AI product release. UBS analysts noted that the absence of a significant AI update could negatively impact near-term iPhone demand and investor sentiment.
Baillie Gifford Supports Elon Musk’s $56 Billion Pay Package
According to Bloomberg, Scottish fund manager Baillie Gifford plans to support Tesla CEO Elon Musk’s $56 billion pay package. Baillie Gifford, a long-time Tesla shareholder, believes the ambitious targets of the compensation plan align with stakeholder returns. Tesla shareholders will vote on the pay plan on June 13, following its voiding by a Delaware judge earlier this year.
Proxy advisors Institutional Shareholder Services and Glass Lewis have recommended voting against the package, and Norway’s $1.7 trillion sovereign wealth fund has also opposed it.
Fed Expected to Cut Rates Once in 2024, According to FT-Chicago Booth Poll
The Federal Reserve is anticipated to reduce interest rates just once this year, based on findings from a Financial Times-Chicago Booth poll. Over half of the surveyed academics predict a single 25 basis-point cut in 2024, while nearly a quarter expect no cuts at all. This survey precedes the Federal Open Market Committee’s “dot plot” release on Wednesday, indicating future borrowing cost expectations.
The Fed is expected to maintain interest rates at a two-decade high of 5.25% to 5.5% after its latest meeting. Officials have indicated they need more evidence of cooling inflation before lowering rates.
Oil Prices Dip Amid Fed Decision and Inflation Data
Oil prices saw a slight decline on Tuesday as traders awaited the Federal Reserve decision and new U.S. inflation figures. The outcomes of these events could impact market expectations for interest rates and demand. Additionally, economic data from China, the world’s largest oil importer, due on Wednesday, may also influence the demand outlook.
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