Stock Market Hits New Highs, Led by Apple Surge, as Investors Eye Fed Decision

The S&P 500 and Nasdaq Composite closed at record highs on Tuesday, fueled by Apple’s jump to an all-time peak. The broader S&P 500 rose 0.27%, while the tech-heavy Nasdaq gained 0.88%. Both indexes even surpassed previous highs during trading. However, the Dow Jones took a different direction, dropping 0.31%.

Analysts believe investors shifted their focus from artificial intelligence leader Nvidia, which dipped slightly, to Apple. Apple’s unveiling of new features potentially leading to increased iPhone upgrades is seen as a major reason behind the surge. The iPhone maker’s stock hit a record high for the first time since December 2023.

Meanwhile, the Federal Reserve’s two-day policy meeting kicked off on Tuesday. The meeting concludes on Wednesday with an interest rate decision and a press conference by Fed Chair Jerome Powell. While some economic indicators suggest a slowdown, investors are increasingly doubtful this will prompt the Fed to cut rates this year.

JPMorgan’s top equity strategist, Marko Kolanovic, highlighted the reduced chance of a rate cut after a stronger-than-expected jobs report in May. He now expects the first rate cut to happen only in November.

Financial instruments indicate no rate cut this week or in July, with a possibility in September. Investors are currently anticipating a 66% chance of a cut by November.

“The market is bracing for a potentially hawkish message from the Fed,” said Bill Merz of U.S. Bank Wealth Management. He expects the Fed to signal a slower pace of rate reductions, not necessarily an increase.

Merz identified the Fed’s economic projections and “dot plot” (a chart showing interest rate expectations) as key points to watch during the meeting. Additionally, the consumer price index data for May will be closely monitored before the Fed’s decision on Wednesday.