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A look at the day ahead in U.S. and global markets

By Naomi Rovnic, Markets Correspondent

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What a difference half a year makes. Traders started 2024 convinced that the U.S. Federal Reserve would be able to cut interest rates up to seven times by December.

Analysts now widely expect Fed officials not only to keep the funds rate at its 23-year high of 5.25% to 5.5% at the end of their monetary policy meeting on Wednesday, but also to project just one or two rate cuts this year, down from three.

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

U.S. inflation data is due just hours before the Fed’s meeting ends and economists polled by Reuters forecast that consumer prices excluding food and energy rose 3.5% in May, down only slightly from April’s 3.6% increase.

Wall Street, for now, is rallying on regardless. Futures markets signal a steady start for U.S. stock markets at the open.

Relentless interest in artificial intelligence drove the benchmark S&P 500 index and the tech-focused Nasdaq to records on Tuesday, as Apple shares surged after it unveiled new AI features for its devices.

Treasuries are also in vogue. The benchmark 10-year yield, at about 4.4%, is heading for its second week of declines.