S&P 500 closes above 5,400 for the first time as Fed notes ‘modest’ inflation progress: Live updates (2024)

The closed above the 5,400 level for the first time in history Wednesday afternoon.

The broader market index gained 0.85% to settle at 5,421.03. The Nasdaq Composite jumped 1.53%, closing at 17,608.44. On the other hand, the Dow Jones Industrial Average slipped 0.09%, or 35.21 points, and finished at 38,712.21.

— Lisa Kailai Han

Bitcoin was slightly higher Wednesday afternoon following the Fed's decision to hold interest rates steady.

The flagship cryptocurrency was up about 1.5% at $68,397.54, according to Coin Metrics. Earlier, it rose as much as $69,999.99.

"Bitcoin might experience short-term volatility as the market adjusts to the news," analysts from Bitfinex said Wednesday. "However, the overall trend could remain positive, especially if the broader economic outlook continues to improve."

"Historically, both rate cuts and holding decisions have significant impacts on asset flows and market prices," they added. "All eight of the last CPI and FOMC events have caused increased volatility, at least on an intra-day or intra-week basis. Since March, however, this volatility increase has been short-lived."

Coinbase gained 5% in late afternoon trading, while MicroStrategy rose 3%. Mining stocks were up across the board.

— Tanaya Macheel

The Federal Reserve kept interest rates unchanged during Wednesday's meeting, although it indicated that it still foresees one rate cut this year.

However, investors can expect the U.S. central bank to increase the number of rate cuts in 2024, according to Ronald Temple, chief market strategist at Lazard.

“Don't take too much direction from today's FOMC ‘dot plot,’” he said in an email. “As additional inflation and labor reports through the summer reaffirm that price pressures are decreasing and labor market tightness is easing, I expect FOMC members to reassess their forecasts yet again to include more rate cuts by year-end.”

— Lisa Kailai Han

While the broader climbed to new highs on Wednesday, the lion's share of blue-chip Dow stocks headed for losses.

More than 2 out of every 3 names in the 30-stock Dow are tracking to end in the red, while the index as a whole is trading around flat. Salesforce, Nike and Chevron led the average lower with declines of more than 2% each.

Just seven names were able to break from the pack. Apple was the big outperformer within the average, helping buoy the index with a rally of more than 6%.

Dow, 1-day

Wednesday's steep drop in Treasury yields fueled a 3% rally in the S&P 500 tech sector, putting it on track for its best day since Feb. 22. Oracle rallied 12% to lead the gains, while Skyworks and Apple popped 7% and 6%, respectively.

— Fred Imbert

The small cap-focused Russell 2000 headed for its best day since February as investors reacted to the latest monetary policy announcement.

The index traded higher by about 2.4%. If that holds through session close, it will mark the index's biggest one-day advance since gaining 2.45% on Feb. 15.

Russell 2000, 1-day

Avidity Biosciences, TeraWulf, ProKidney, LendingTree and Sunnova helped lead the index higher, with all up more than 12%.

— Alex Harring, Gina Francolla

Despite seemingly announcing only incremental changes at its Worldwide Developers Conference, Apple's updates to its payments platform and partnership with Affirm will help the iPhone maker solidify its financial services position, per UBS.

"While many of these announcements are marginal changes/product enhancements, taken together these feature additions bolster Apple Pay's competitive positioning as a dominant payment method, and increase potential use cases," analyst Timothy Chiodo wrote Wednesday.

— Brian Evans

The Federal Reserve kept interest rates unchanged, as investors had largely expected. The U.S. central bank also released projections that indicated just one rate cut taking place this year.

— Lisa Kailai Han

Bank of America has removed Salesforce from its "US 1" top picks list, the latest sign that Wall Street is growing skittish of the software giant.

Shares of Salesforce fell sharply after a disappointing quarterly report in late May. The stock is still down about 11% from where it was before the report.

Bank of America did not provide commentary about the move in the note announcing the updated list. Analyst Brad Sills still has a buy rating on the stock, according to the note.

— Jesse Pound

More inflation readings such as the May consumer price index report could help the stock market move away from its reliance on megacap tech, according to Key Private Bank Chief Investment Officer George Mateyo.

"We've been thinking for a while that small-cap stocks are due for some recovery, and we've kind of seen that today. So I think it's fair to say that the market is positioned … that when the Fed does decide to shift to the downside and start thinking about cutting rates, you'll see more participation," Mateyo told CNBC in a phone call Wednesday.

The small-cap Russell 2000 was up 2.7% in midday trading.

— Jesse Pound

Here are the stocks on the move midday:

• Oracle— Shares of the software maker surged more than 12% to an all-time high after the database management companyannounced cloud dealswith Google and OpenAI. Oracle said it would bring its database to Google's cloud in November. It is also partnering with Microsoft and OpenAI to deliver supplemental computing capacity. Investors looked past Oracle's disappointing fourth-quarter results that fell short of Wall Street expectations.
• Apple— The iPhone maker climbed another 4%, brieflysurpassingMicrosoftin market value. This comes after Apple jumped 7.3% Tuesday after unveiling itsartificial intelligenceplans calledApple Intelligenceduring its developers conference.
• Rentokil Initial— Terminix parent Rentokil's shares jumped 14.5% after Nelson Peltz's Trian Partnersamassed a significant positionin the pest-control provider. A Trian spokesperson told CNBC on Tuesday that the firm, currently one of Rentokil's top 10 shareholders, wants to work with leadership on "ideas and initiatives to improve shareholder value."

Read the full list here.

— Sean Conlon

Small-cap stocks outperformed on Wednesday.

The small cap-focused Russell 2000 climbed more than 2.5% in the session. By comparison, the broad added just more than 1%.

The Russell 2000 vs. S&P 500, 1-day

The move comes between Wednesday morning's consumer price index reading for May and before the all-important Federal Reserve policy announcement and press conference scheduled for the afternoon.

— Alex Harring

Wall Street will need more good news on the inflation front even after May's consumer price index came in cooler than expected, according to Goldman Sachs Asset Management.

Investors have greater confidence in rate cuts coming this year after the lighter inflation reading. Markets were last pricing in a roughly 63% chance the Federal Reserve will cut by a quarter percentage point in September, up from even odds the day before, according to the CME FedWatch Tool.

But Lindsay Rosner, head of multisector investing at Goldman Sachs Asset Management, expects the Fed will need more encouraging data to gain confidence it can start easing.

"It would take an extremely soft CPI print to change the course of the Fed in July after a strong payroll report last week. We squarely believe today is a no-go meeting and the CPI number was not weak enough to change our view on July's meeting," Rosner wrote.

"While September may be on the table, today would have had to be the first of a handful of inflation data prints that went right, which it did. It does remain challenging, however for inflation to cool with the backdrop of the summer's heat," Rosner continued. "Let's see what the Fed forecasts this afternoon. This is good news, but we will need more of it."

— Sarah Min

Apple once again became the world's most valuable company, edging out Microsoft on Wednesday morning after reaching a market cap of $3.244 trillion.

The smartphone maker unveiled its new artificial intelligence features, called Apple Intelligence, during its developers conference keynote on Monday. The company announced it would integrate generative AI technology across its native apps and its latest devices, with plans to implement features such as writing-assistance technology.

Analysts walked away from the conference optimistic that Apple's AI efforts could lead to a new, and long-anticipated, iPhone upgrade cycle. BTIG said Tuesday that Apple looks poised to beat Nvidia and the rest of the "Magnificent Seven" batch of Big Tech stocks from here.

For more, read here.

— Pia Singh

Wednesday's early rally showed strong breadth, with the bulk of New York Stock Exchange-listed stocks trading higher. As of 10:30 a.m. ET, more than seven stocks traded higher for every decliner at the NYSE. Overall, 2,337 names were up, while only 322 slipped.

— Fred Imbert

Days like Wednesday where there is both a Federal Reserve policy meeting and consumer price index report are typically good for stocks, according to Oppenheimer's sales and trading team.

There has only been 13 occurrences in the past 15 years when both have taken place on the same day. On the average session of these 13, the market rose 0.7%.

— Alex Harring

The price of bitcoin rose more than 3% Wednesday morning after the Bureau of Labor Statistics reported the consumer price index held flat in May.

"How you're seeing the market respond today is indicative that even the slightest cooling of the CPI and inflation is enough to make the market believe rate cuts are coming in the near future," said Chris Kline, co-founder and chief operating officer of BitcoinIRA. "This expectation is driving up prices of all assets, including bitcoin.

"That said, these moves offset pullbacks from last week," he added. "I would expect the real breakouts for bitcoin to happen later this summer as the lagging halving effect kicks in."

Crypto-related equities rose with bitcoin and the broader market for risk assets. Coinbase added 4% and MicroStrategy gained 7%. Miners across the board were higher, too, although Riot Platforms and CleanSpark saw some of the biggest gains at more than 6% each.

— Tanaya Macheel

The consumer price index reading for May gives Federal Reserve Chair Jerome Powell the "all clear" to signal two interest rate cuts this year, according to Wolfe Research.

"Our expectation is that he'll maintain a very dovish tone," chief investment strategist Chris Senyek told clients in a Wednesday note ahead of the Fed meeting at 2 p.m. Wednesday. "This should favor the Mag 7 and the secular growers generally, as economic data continues to come in choppy over the remainder of the summer."

May's CPI data came in flat on the month and increased 3.3% from one year ago. The measure was expected to show a 0.1% increase from April, which would have equated to an aggregate annual rise of 3.4%.

The cooler-than-expected inflation data "keeps the 'Fed Put' firmly in place," he said. This means that the market still expects the central bank to "step in and cut at the first signs of real economic weakness."

— Sean Conlon

Andrew Left's Citron Research said it is no longer shorting meme stock GameStop after the video game retailer raised billions of dollars in a stock sale to take advantage of the recent trading craze.

"It's not because we believe in a turnaround for the company fundamentals will ever happen, but with $4 billion in the bank, they have enough runway to appease their cult like shareholders," the firm said in a post on social media site X on Wednesday.

Citron shorted the stock again when meme stock champion and trader Roaring Kitty resurfaced online. More than three years ago, the short seller had quit short selling altogether after getting burned by its GameStop bearish bet in the retail trading mania.

— Yun Li

A cooler inflation report adds to confidence the first rate cut from the Federal Reserve could come sooner, rather than later, according to Charlie Ripley, senior investment strategist at Allianz Investment Management.

"As we hear from the Fed later today, today's inflation data should be another feather in the cap for Chairman Powell and raise the confidence for the rest of the voting members," Ripley wrote. "More importantly, as we look further out on the calendar, the distance from here to the first rate cut of the cycle appears to be rapidly approaching."

— Sarah Min

May's cooler-than-expected inflation report sent stocks higher for Wednesday's market open.

The added 0.9% while the Nasdaq Composite increased 1.1%, with both indexes opening at new record highs. The Dow Jones Industrial Average added 334 points, or 0.9%.

— Lisa Kailai Han

U.S. Treasury yields fell sharply Wednesday morning after the consumer price index report showed that inflation was unchanged month over month in May.

The 10-year Treasury yield fell 11 basis points to 4.293%. The 2-year Treasury yield sank 13 basis points to 4.701%.

Yields move opposite of bond prices, and a basis point is equal to 0.01 percentage points.

The move could be a sign that traders think the cool inflation report is making it more likely that the Federal Reserve will cut rates this year.

— Jesse Pound

The consumer price index came in cooler than expected, giving stock futures a boost on hope that inflation pressures are easing.

CPI was unchanged in May month over month and up 3.3% from a year earlier. Economists polled by Dow Jones expected CPI to rise 0.1% month over month and 3.4% year on year.

Core CPI, which strips out food and energy prices, was also cooler than forecast, rising just 0.2% month on month. Core prices were expected to have increased 0.3%.

— Fred Imbert

Here are some of the stocks making the biggest moves before the bell:

• Paramount Global — The stock shed 3.3% after National Amusem*nts stopped talks with Skydance on a proposed merger with Paramount, per CNBC's David Faber.
• Oracle — Shares jumped 7.4% after the cloud services company announced deals with Google and OpenAI. Oracle expects to make its database available to Google Cloud beginning in November, and also planned to partner with Microsoft and OpenAI for additional computing capacity.
• Birkenstock — The stock slipped 2.6% following a downgrade to neutral from buy at Goldman Sachs. The bank said shares, which are up about 21% year to date, have outperformed the broader luxury peer group.

To see more names moving in the premarket, read the full story here.

— Michelle Fox

While investors are largely in agreement that the Federal Reserve will leave rates unchanged on Wednesday, it will still be a pivotal day to set the near-term tone for the market, according to UBS.

Starting in the morning with May's consumer price index reading, investors will be looking for evidence that costs and inflation are coming down, the bank wrote.

But "the most concrete metric for investors will be the quarterly release of the dot plot — which charts the interest rate predictions of top Fed officials," the bank said. "A dot plot that only narrowly avoids a decline to one implied rate cut would likely cause more anxiety, as it would suggest a more hawkish tilt to policy."

UBS is still forecasting that the U.S. central bank will cut rates twice this year, with the first taking place in September.

— Lisa Kailai Han

Data from the Mortgage Bankers Association showed total mortgage application volume surged 16% relative to the week prior as rates fell slightly.

"Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates," said Mike Fratantoni, MBA's senior vice president and chief economist.

— Fred Imbert, Diana Olick

European markets opened higher on Wednesday, with most sectors starting the day in the green.

The pan-European Stoxx 600 was up 0.35% at 8:14 a.m. London time. Banks led gains and were last up 0.84%, while autos stocks dropped 0.78%.

The U.K.'s FTSE 100 was last up 0.56%, while France's CAC 40 rose 0.35% and Germany's DAX was 0.39% higher.

— Sophie Kiderlin

DoubleLine Capital CEOJeffrey Gundlachbelieves the Federal Reserve's so-called dot plot will show a projection of only two rate cuts for this year, he said in an investor webcast Tuesday after the bell.

That would be down from the previous forecast of three interest rate cuts indicated for 2024.

The dot plot indicates how 19 FOMC members, both voters and nonvoters, expect where rates would be through the end of the year and out to 2026 and beyond.

The noted fixed income investorpreviously saidhe sees no more than one interest rate cut this year as the Fed continues to fight inflation.

— Yun Li

Check out the companies making headlines in after-hours trading:

• Oracle— The tech company's shares jumped nearly 9% after itannounced cloud dealswith Google and OpenAI, despite posting a miss on fiscal fourth-quarter results. Oracle posted adjusted earnings of $1.63 per share on revenue of $14.29 billion, while analysts expected earnings of $1.65 per share on $14.55 billion in revenue.
• Rubrik— Shares of the cloud data management company advanced 1.4% after beating first-quarter expectations on revenue. Rubrik reported $187 million in revenue for the period, while analysts polled by LSEG anticipated $172 million.
• Rentokil Initial— Shares in Terminix-parent Rentokil jumped about 7.5% after Nelson Peltz's Trian Partnersconfirmed it has taken a significant positionin the pest-control giant and is currently a top-10 shareholder of the company.

For more, read here.

— Pia Singh

Stock futures were slightly lower shortly after 6 p.m. ET. and Nasdaq 100 futures traded lower by 0.05% and 0.09%, respectively. Dow futures slipped just below the flatline, meanwhile.

— Pia Singh