Oil Prices Rise Amid Middle East Tensions, Feds’ Rate Cut Speculations

Research Analyst
Oil settled higher on Wednesday as ongoing tensions in the Middle East lent support to prices, but news that interest rate cuts could start as late as December capped gains, following the Federal Reserve’s statement concluding its two-day meeting. Brent crude futures settled 68 cents, or 0.83%, higher at $82.60 a barrel, with U.S. West Texas Intermediate (WTI) crude futures up 60 cents, or 0.77%, to $78.50. However, U.S. crude stocks posted a surprise build last week, up by 3.7 million barrels to 459.7 million barrels, compared with expectations of a 1 million barrel-draw
Federal reserve maintains interest rate amid unchanged CPI
On Wednesday, the Federal Reserve maintained interest rates within the range of 5.25%-5.50%. Policymakers expressed satisfaction with the current rates, indicating a willingness to keep them unchanged until the economy provides clear signals necessitating adjustment, such as a more pronounced decline in price pressures or a significant increase in the unemployment rate. In April, the PCE price index exhibited a 2.7% annual growth rate, while the CPI for May remained stable. The S&P 500 and Nasdaq Composite indices closed notably higher for the day, accompanied by a decline in the U.S. dollar and yields on U.S. Treasuries. In response to the surge in inflation following the COVID-19 pandemic, the Fed implemented aggressive rate hikes in 2022 and 2023.
India’s retail inflation eases to 4.75% in May 
India’s retail inflation rate eased slightly in May, bolstered by fall in fuel prices amid elevated  food prices. Annual retail inflation in May was 4.75%, down from 4.83% recorded in April. Food inflation, which accounts for nearly half of the overall consumer price basket, rose 8.69% year-on-year in May, compared with an 8.70% rise in the previous month. Core inflation, which strips out food and energy prices, was lower at 3.12% in May, as compared with 3.23% in April. High food prices have led to the RBI keeping its key interest rate unchanged for eight straight policy meetings, in a bid to combat  retail inflation to 4%.
Apple’s market valuation hits $3.29trillion, dethrones Microsoft from top spot 
Apple once again became the world’s most valuable company on Wednesday, dethroning Microsoft from the top spot, as the iPhone maker pushed ahead in a race to dominate artificial intelligence technology. Its shares jumped nearly 4% to a record $215.04, giving it a market valuation of $3.29 trillion. Microsoft’s market capitalization stood at $3.24 trillion, falling behind Apple for the first time in five months. The stock surge comes as the tech-heavy Nasdaq hit a record high on fresh signs of cooling inflation. Apple’s shares have risen about 12% so far in 2024, while Microsoft has added about 16% and Alphabet nearly 28%.