One More Interest Rate Cut This Year 2024 🎉🎊

Surprise cooling in US CPI inflation data brought a significant boost to the stock market. In May, the year-on-year CPI growth slowed to 3.3%, with zero month-on-month growth, while core CPI rose 3.4% year-on-year and 0.2% month-on-month, all signaling a clear sign of inflation easing. This outcome completely absorbed expectations of two interest rate cuts this year. The $Dow Jones Industrial Average (.DJI.US)$ and $NASDAQ (NASDAQ.US)$ indices soared to historic highs for three consecutive days on this positive news.

Meanwhile, the Federal Reserve, in its recent meeting, stated that although inflation has cooled somewhat, it remains above target and more positive data is needed to support rate cut decisions. Powell emphasized the need for more "good data" despite the significant slowdown in inflation. The Fed now expects only one rate cut this year, reducing its previous forecast of three.

On the individual stock front, tech stocks surged, driven by the AI frenzy. $NVIDIA (NVDA.US)$, $Microsoft (MSFT.US)$, $Broadcom (AVGO.US)$, and $Taiwan Semiconductor (TSM.US)$ all hit new highs, with $Broadcom (AVGO.US)$ jumping over 10% after reporting strong earnings after-hours. $Apple (AAPL.US)$'s stock surged over 7% after unveiling new features at the WWDC conference, briefly surpassing $Microsoft (MSFT.US)$ to become the most valuable company by market capitalization, although $Microsoft (MSFT.US)$ regained the lead later on.

In the fixed-income market, after the CPI data release, US bond prices soared, and yields sharply declined. The 10-year Treasury yield plummeted by over 10 basis points, hitting a two-month low. The $USD (USDindex.FX)$ index plunged after the data was released, although it rebounded slightly after the Fed meeting, with limited gains.

Crude oil prices rose for three consecutive days, reaching a two-week high. The metals market also showed strong performance, with London zinc and tin rising over 4%, and copper nearly 2%.

In the Chinese market, the $SSE Composite Index (000001.SH)$ Index edged up slightly, with strong performances from healthcare and coal stocks. Meanwhile, with China's May CPI rising by only 0.3% and PPI narrowing its year-on-year decline, signs of economic stability are evident. Chinese concept stocks dipped slightly after the US CPI data was released, but the decline was limited. The offshore renminbi significantly appreciated after the data release but retreated after the Fed meeting, reflecting the market's comprehensive response to the global economic outlook.