US equity markets set new record highs on Wednesday, with the latest inflation figures fuelling investor optimism ahead of the Fed's forthcoming announcements.

In late morning trading, the Dow Jones rallied 0.4% to 38,898 points, while the Nasdaq Composite gained 1.8% to 17,655.8 points.655.8 points, after recording its umpteenth all-time high at 17,677.5 points earlier in the day.

The Labor Department announced this morning that the Consumer Price Index (CPI) remained unchanged in May, after rising by 0.3% in April.

Analysts were expecting a rise of 0.1%.

The so-called core CPI, which excludes volatile items such as food and energy, rose by 0.2% last month, in line with expectations.

This is the lowest figure since August 2021.

'This report is clearly good news for the Fed', says Bastien Drut, Head of Strategy and Economic Research at CPR AM, who hails 'finally a real good surprise' in US inflation.

Whereas the year 2024 had started badly, with the first four inflation reports being worse than expected, the April report, in line with expectations, and the May report, better than expected, will be able to revive discussions on Fed rate cuts", he stresses.

The Fed is not expected to announce anything, but its forecasts and the indications it gives on the evolution of its policy will be closely followed by the markets.

Traders now estimate the probability of monetary easing in the autumn at over 61%, according to CME's FedWatch tool, compared with around 46% yesterday.

The monetary policy statement will be released in the early afternoon, followed 30 minutes later by a press conference by Fed Chairman Jerome Powell.

Meanwhile, the rather subdued inflation figures published this morning have pushed yields back down, with 10-year paper returning to below 4.27%, its lowest level since the end of March.

On the stock front, Apple continues to be the driving force, gaining over 4% after a 7% rise the previous day following the well-received presentation of its AI strategy.

According to Wedbush, these advances in artificial intelligence could pave the way for Apple to reach a market capitalization of $4,000 billion over the next 12 months, compared with $3,000 billion today.

For its part, Oracle climbed 10% after the release of solid quarterly results, prompting analysts to view the enterprise software developer's targets as cautious.

In the energy market, WTI light Texas crude remained on an upward trend, rising 0.1% to $78 following the announcement of a weekly increase in crude oil inventories

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