The next rate decision from the Federal Reserve coupled with May inflation data, both on Wednesday, will play key roles in how stocks perform next week — quite probably lending added volatility to an already jittery market. Stocks look poised to cap off the first winning week of June on a positive note, with Nvidia powering the market to new highs to briefly break above a $3 trillion market capitalization and temporarily unseat Apple as the second most valuable company after Microsoft.
Trading in fed funds futures are now pricing in a 54% chance of a cut in September and nearly 90% odds of easing in December, according to the CME Group's FedWatch too l. Any inkling next week that a rate cut could come earlier – such as September – will prove a dovish signal to the market, said Envestnet's Dana D'Auria.