📊 Market Event Update

Market Event Recap:

• 🏛️ Fed decision. Rates are expected to stay on hold on Wednesday. But it’s all eyes on the ‘dot plot’ – given some stubborn data readings, it could show two cuts planned this year instead of three.

• 🇺🇸 US inflation. The final data point for the Fed’s consideration drops on Tuesday. May CPI is expected to rise by 0.2% MoM and 3.4% YoY.

• 🔮 Oracle earnings. The software company publishes its Q4 earnings on Tuesday. The stock is already up some 14% this year.

Market Event Update:

🏛️ Fed decision.

• The Federal Reserve is maintaining its key interest rate at 5.5% to manage elevated inflation, despite strong economic activity and job gains.

• Inflation has shown signs of easing, with the 12-month rate dropping to 3.3% in May, leading to speculation about a possible rate cut in the fall if this trend continues.

• The Fed faces external pressure to cut rates, but remains committed to data-driven decisions, aiming for consistent positive inflation data before considering changes.

🇺🇸 US inflation.

• The U.S. Consumer Price Index (CPI) was unchanged in May, with the year-over-year rate at 3.3%, slightly below expectations, reducing immediate pressure on the Federal Reserve to cut interest rates before September.

• Core CPI, excluding food and energy, rose 0.2% in May and 3.4% year-over-year, the smallest annual increase since April 2021, indicating progress towards the Fed's 2% inflation target.

• Market reactions were positive, with stocks rising, bond yields falling, and the dollar weakening, as investors interpreted the data as a sign of easing inflation and potential future rate cuts.

🔮 Oracle earnings.

• Oracle announced significant cloud infrastructure deals with Microsoft, OpenAI, and Google, aiming to boost AI training capabilities through expanded data centers and partnerships.

• Oracle expects continued strong cloud demand and double-digit revenue growth driven by the need for data centers and cloud capacity to support advancing AI models.

• Oracle differentiates itself by offering comprehensive data center services, including sovereignty solutions, which are critical for government and other security-focused customers.