US Stock Market Pulls Back Awaiting Fed Decisions

As the world awaits the start of a crucial US Federal Reserve meeting on Tuesday, the American stock market has suffered a notable decline.

The S&P 500 index saw a 0.5% drop, while the technologically-inclined Nasdaq Composite saw a roughly 0.2% decline, both pulling back from their all-time highs. The Dow Jones Industrial Average was particularly impacted, recording a drop of more than 350 points, or about 0.9%.

Investors are at a crossroads, assessing an economic outlook that teeters between being excessively hot and unexpectedly cold. Recent economic data, which has shown mixed results, has increased uncertainty about the possibility of multiple interest rate cuts in 2024, an expectation previously set by the Fed in March. Currently, most investors have adjusted their expectations to just one rate cut before the end of this year.

This two-day meeting on monetary policy is particularly significant as it is expected to end with lending rates maintained at the highest levels seen in the past two decades. All eyes are on any signs that changes, possibly in September or November, could signal the start of rate cuts.

Expectations are also heightened by the imminent release of consumer inflation data for May, on Wednesday, essential for the Fed’s future decisions.

At the individual company level, Apple stood out, whose shares rose 3% after a significant loss in the previous session. This increase came following the announcement of its latest innovation in artificial intelligence. On the other hand, shares of pharmaceutical company Eli Lilly rose significantly after its experimental Alzheimer’s treatment received unanimous support during an evaluation by an FDA advisory panel.

At the time of publication, the price of Bitcoin was quoted at US$66,910.12 with a drop of 3.9% in the last 24 hours.

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