US equities climb on data indicating easing price pressures

The S&P 500 was 0.4% higher in midday trading after riding a winning streak to its best level since April 2022. The Dow Jones Industrial Average was down 85 points, or 0.2%, at 34,126, as of 11:30 a.m. Eastern time, while the Nasdaq composite was 0.6% higher.

The wide expectation on Wall Street is that the Fed will make no move, which would be the first time in more than a year where it hasn’t raised rates. Inflation has come down since its peak last summer1, and a report Wednesday morning showed price gains at the wholesale level eased in May to the most modest inflation from year-earlier levels since 2020.

Many on Wall Street don’t expect this to be the end to the Fed’s rate hikes. The widespread bet is that it will resume raising rates in July. The federal funds rate is currently in a range of 5% to 5.25%, up from virtually zero early last year.

Inflation remains stubbornly high and is hurting all kinds of households, particularly those with lower incomes. It’s also giving ammunition to the members of the Fed considered “hawks,” or the ones more inclined to keep raising rates, while “doves” favor a longer pause.