Markets are not anticipating much from the Federal Reserveâs meeting this week, but good news may be on the horizon for June.
Stock indices saw mixed performance on Monday as traders awaited a major Federal Reserve announcement. The Dow Jones was trading at 41,414, up 96.64 points or 0.23%. Meanwhile, the S&P 500 slipped 12.9 points or 0.23% to 5,673, and the Nasdaq was down 54.21 points or 0.30% at 17,923.
According to LPL Financial chief economist Jeffrey Roach, the Fed may use this weekâs meeting to prepare investors for coming rate cuts. A combination of labor data and inflation statistics, according to Roach, suggests that rate cuts could be set for June, October, and December.
While inflation continues to hold above the Fedâs target of 2%, currently at 2.39%, it has seen two consecutive months of declines. The main reason for inflation cooling is likely the dropping demand due to inflation risks. This is despite the fears that U.S. tariffs, especially on China, would have ripple effects on consumer prices.
Good news on the inflation front is that OPEC+ announced it would raise its output by 411,000 from June 1. The news contributed to a sharp drop in oil prices, which soon stabilized. Oil prices are a major contributor to inflation, and their declines will have positive effects on consumer prices.
In trade policy, markets were rattled by Donald Trumpâs new plans to impose 100% tariffs on foreign-made movies. On Monday, May 5, the President accused foreign countries of offering incentives to drive studios away from the United States, and called this a âNational Security threat.â
One of the biggest losers today was a multinational conglomerate, Berkshire Hathaway. Its stock fell 4.33% on news that its founder, Warren Buffett, would retire as CEO, while still remaining the companyâs president.