While global markets held their breath in anticipation of key economic events — including the release of U.S. Consumer Price Index (CPI) data and the Federal Reserve's upcoming policy meeting — Wall Street delivered a surprising twist on June 11.
S&P 500 and Nasdaq Reach New Highs, Powered by Apple
Defying cautious sentiment, the S&P 500 surged 0.27% to close at 5,375.32, while the Nasdaq Composite jumped 0.88% to a record 17,343.55. In contrast, the Dow Jones Industrial Average dipped slightly by 0.31%, ending the day at 38,747.42. This divergence suggests that investors are increasingly rotating into high-growth sectors — particularly tech — despite broader macroeconomic uncertainties.
Apple emerged as the market’s brightest star, driving optimism with the unveiling of new AI-powered features for iPhones. The excitement around Apple's innovations also appeared to draw attention away from previous AI leader Nvidia, indicating a shift in investor focus toward emerging growth narratives.
AI Arms Race Intensifies, Market Bets on Innovation
Apple’s entry into the AI arena appears to have sparked a new wave of investor enthusiasm, fueling speculation that the company could become a major force in the next phase of technological transformation. As capital flows toward fresh opportunities, it’s becoming clear that investors are ready to reward firms that demonstrate clear AI strategies.
Fed Meeting and CPI Report in the Spotlight
All eyes are now on the Federal Reserve’s policy meeting on June 12 and the CPI report for May. While recent economic indicators show signs of a slowdown, inflation remains sticky, limiting the Fed's ability to ease monetary policy in the short term.
The strong May jobs report delivered an unexpected blow to rate-cut expectations. JPMorgan strategist Marko Kolanovic noted a significant decline in the likelihood of rate cuts in the near term. Similarly, CME’s FedWatch tool indicates markets now largely expect the Fed to hold rates steady for the next two meetings.
Bill Merz, Head of Capital Markets Research at U.S. Bank Wealth Management, echoed this sentiment, stating that markets should brace for a "hawkish hold" — a scenario where the Fed maintains elevated rates for longer to ensure inflation is fully under control.
Asia Mixed as Global Caution Builds
While U.S. equities moved higher, Asian markets were mixed. Tokyo’s Nikkei 225 edged up 0.3% to 39,134.79, but most other major indices fell. Hong Kong’s Hang Seng dropped 1.04%, Shanghai’s Composite Index lost 0.8%, and regional markets in Singapore, Taipei, Manila, and Jakarta also closed lower.
This regional divergence underscores the global market's sensitivity to U.S. monetary policy — and the increasingly international nature of investor sentiment around inflation and interest rate expectations.
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