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US stocks mixed as Fed, CPI loom large next week


By Sruthi Shankar, Shristi Achar A and David Carnevali

(Reuters) – U.S. stocks were wavering on Tuesday despite some advances in economically sensitive sectors, as investors awaited inflation data and the Federal Reserve’s policy meet next week.

Inflation data is expected to show consumer prices cooled slightly on a month-over-month basis in May but core prices are likely to have remained elevated, and the Fed is widely expected to hold interest rates.

Investors were taking a breather after pushing the S&P 500 up almost 20% from its October 2022 lows, boosted by gains in megacap stocks, a stronger-than-expected earnings season and hopes that the U.S. central bank is nearing the end of its interest rate-hike cycle.

The Dow Jones Industrial Average fell 87.07 points, or 0.26%, to 33,475.79, the S&P 500 gained 0.47 points, or 0.01%, to 4,274.26 and the Nasdaq Composite added 28.09 points, or 0.21%, to 13,257.52.

“It looks like investors are gaining a little optimism,” said Cresset Capital CIO, Jack Ablin.

“The narrowness in the market where everyone was focused on the top seven names or so is starting to dissipate a little bit and that’s good news.”

Financials rose 1.05% to lead gains among the 11 major S&P 500 sectors, while the KBW regional banking index jumped 4.77%. The Russell 2000 index of small-cap companies added 2.28%.

Recent economic data and dovish remarks from Fed officials have raised the odds of the Fed holding interest rates at its June 13-14 meeting.

Fed fund futures indicate traders have priced in a near 80% chance that the central bank will hold interest rates in the 5%-5.25% range, according to CMEGroup’s Fedwatch tool. However, they see 50% odds of another 25-basis-point rate hike in July.

The CBOE volatility index hit its lowest since July 2021, down 0.36 points at 14.37.

Coinbase Global plunged 13.04% after the U.S. Securities and Exchange Commission sued the crypto exchange, accusing it of illegally operating without having first registered with the regulator.

Apple Inc extended losses to slip 0.16%, a day after the iPhone maker unveiled a costly augmented-reality headset called the Vision Pro, barging into a market dominated by Meta.

Advanced Micro Devices rose 4.20% after Piper Sandler raised the price target on the stock to $150, the second highest on Wall Street, as per Refinitiv data.

Advancing issues outnumbered declining ones on the NYSE by a 2.72-to-1 ratio; on Nasdaq, a 2.25-to-1 ratio favored advancers.

The S&P 500 posted 14 new 52-week highs and five new lows; the Nasdaq Composite recorded 92 new highs and 62 new lows.

(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi and Deepa Babington)

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