News updates from June 12: Fed officials signal one 2024 interest rate cut; US inflation falls to 3.3% in May

The Republican-led US House of Representatives has voted to hold the country’s highest law-enforcement official in contempt of Congress for failing to hand over recordings of Joe Biden’s interview with special counsel Robert Hur.

The House on Wednesday voted 216-207, along party lines, in favour of censuring attorney-general Merrick Garland, as allies of former president Donald Trump escalated their attacks on the Department of Justice.

Garland appointed Hur in January 2023 to investigate Biden’s handling of classified information. The special counsel did not charge the president but ignited a political firestorm in February when his report cast Biden as an “elderly man” whose “memory was significantly limited” during interviews with investigators.

JPMorgan Chase now expects investment banking revenues in the second quarter to be up 25 per cent to 30 per cent from a year earlier, about twice the sales growth it had forecast just a few weeks ago. 

Troy Rohrbaugh, co-head of JPMorgan’s investment banking and trading business, said capital markets activity was “extremely robust” and helped drive the better outlook than the bank had predicted at its recent May 20 investor day. 

“The overall franchise has improved and saw better results than we were expecting on investor day but capital markets has been particularly strong,” Rohrbaugh said at an industry conference on Wednesday. 

Broadcom boosted its full-year revenue outlook thanks to continued demand for its AI product and announced a stock split, sending shares of the US chipmaker higher in extended trading.

The company said now it expected full-year sales of $51bn, up from $50bn and higher than analysts had expected. That came as the company reported second-quarter revenue and adjusted net income that topped consensus expectations.

Broadcom also announced a 10-for-one stock split to take effect after the closing bell on July 11. The stock closed at $1,495.51 on Wednesday after a 2.4 per cent rise, and added a further 12 per cent in after-hours trading.

“Broadcom’s second-quarter results were once again driven by AI demand and VMware,” chief executive Hock Tan said. “Revenue from our AI products was a record $3.1 billion during the quarter.”

US stocks closed at record highs for the third straight session as a domestic inflation report slowed more than expected in May and Federal Reserve officials forecast one interest rate cut in 2024.

The S&P 500 rose 0.9 per cent on Wednesday and the Nasdaq Composite gained 1.5 per cent. Gains from earlier in the session moderated during afternoon trading, as Fed chair Jay Powell concluded his press conference.

Apple shares rose as much as 6.3 per cent during intraday trading, resulting in the company briefly eclipsing Microsoft to again become the most valuable US stock. However, the iPhone maker was unable to sustain the momentum, its 2.9 per cent move by the closing bell not enough to push its market capitalisation ahead of its peer, whose shares gained 1.5 per cent.

The small-cap focused Russell 2000 added 1.6 per cent.

The dollar weakened 0.5 per cent against a basket of six peer currencies.

Chief executives have maintained a stable outlook for the US economy, but are still cautious, according to Washington lobby group Business Roundtable.

The Business Roundtable, which is meeting former president Donald Trump on Thursday in Washington, saw its economic outlook index tick down by 1 point to its historic average of 83 in the second quarter. 

Plans for hiring held flat, while capital investment plans decreased 8 points to a value of 70. Expectations for sales increased 5 points to a value of 123. 

Although its third estimate for 2024 GDP growth rose to 2.3 per cent from 2.1 per cent last quarter, most chief executives still have concerns over the direction of the economy. 

US stocks remained higher after a domestic inflation report came in slightly below consensus expectations and Fed officials signalled they would cut interest rates just once this year.

The benchmark S&P 500 was up 1 per cent after the Fed’s policy decision, where it decided to keep rates on hold. The Nasdaq Composite was up 1.7 per cent. Those were roughly the levels the indices were at before the announcement.

Before the Fed decision, Treasuries had rallied, pushing yields to their lowest levels since early April. The rally moderated slightly after the Fed decision, with the yield on the two-year note down 0.12 percentage points to 4.71 per cent.

Yemen’s Iran-backed Houthis on Wednesday staged their first successful attack on a commercial ship with a sea drone, inflicting serious damage on a vessel for only the second time since March.

The UK’s Maritime Trade Operations office said the dry bulk carrier Tutor was hit at 7.14am London time by a “small craft” five to seven metres in length. The office subsequently reported the vessel was taking on water, was not under the crew’s control and had been hit by a second “unidentified projectile”.

The attack took place 66 nautical miles south-west of the Yemeni port of Hodeida.

While US forces have reported seeing sea drones ready to launch from Yemen, the attack is the first in the Houthis’ current campaign to make successful use of an uncrewed vessel. The group have previously successfully used the weapons against Saudi Arabia’s warships.

Terraform Labs, the company behind the $40bn collapse of TerraUSD digital tokens in 2022, has agreed to pay $4.47bn to settle charges brought by the US Securities and Exchange Commission. 

According to court documents filed on Wednesday, Terraform has agreed to offer all the relief sought by the regulator, including barring the company from “engaging in crypto asset securities transactions”.

The agreement comes after the SEC last year sued the collapsed stablecoin operator and its chief executive, Do Kwon, for allegedly arranging a cryptocurrency fraud that led to billions of dollars in losses.  

The SEC declined to comment beyond the court document. Terraform did not immediately respond to a request for comment.

The leader of France’s mainstream conservatives was booted out of the party after enraging colleagues with his call for an electoral pact with the far-right party of Marine Le Pen.

Eric Ciotti was stripped of his membership of the centre-right Les Républicains by the party’s executive committee on Wednesday. Earlier in the day, the power struggle gripping LR took a farcical turn when Ciotti shuttered party headquarters in what his opponents said was an attempt to thwart his removal.

Ciotti said he had locked the Paris building for security reasons following “threats received and disorder” on Tuesday.

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Mexican billionaire Carlos Slim has taken a 3 per cent stake in BT after its new chief executive Allison Kirkby unveiled her plans to turn around the UK telecoms group at its full-year results last month.

The FTSE 100 company on Wednesday announced the position of banking and financial services company Inbursa, controlled by the family of telecoms tycoon Slim.

BT in a separate statement said “we welcome any investor who recognises the long-term value of our business” and “we look forward to engaging with Inbursa, just as we do with all investors”.

Read more here.

European stocks rose on Wednesday, buoyed by cooler than expected US inflation data ahead of the Federal Reserve’s monetary policy announcement later in the day.

The region-wide Stoxx 600 added 1.1 per cent. Germany’s Dax rose 1.4 per cent and London’s FTSE 100 rose 0.8 per cent. France’s Cac 40 climbed 1 per cent, having dropped on Monday and Tuesday following French President Emmanuel Macron’s decision to call a snap legislative election.

The euro rallied 1 per cent against the dollar to $1.0843. 

Joe Biden and Volodymyr Zelenskyy are set to sign a bilateral security agreement that would deepen the long-term defence co-operation between the US and Ukraine.

US national security adviser Jake Sullivan on Wednesday told reporters travelling with Biden to the G7 meeting that the agreement would be signed on Thursday when the presidents of the US and Ukraine are due to meet.  

“We want to demonstrate that the US supports the people of Ukraine, that we stand with them, and that we will continue to help address their security needs, not just tomorrow, but out into the future,” Sullivan said. 

The Financial Times first reported that the US and Ukraine were set to sign the agreement last month. Sullivan said Washington had secured pledges from Kyiv on reforms and “end use monitoring” for the weapons provided by the US. 

“In deepening co-operation with Ukraine, our government will benefit from Ukraine’s insights and experience, its battlefield innovations and its lessons learned from the front,” Sullivan said. 

Jake Sullivan, the US national security adviser, said some of Hamas’s changes to a proposed peace plan in Gaza differed “substantively” from the one backed by the UN Security Council this week, but vowed the US would keep working to complete talks that would lead to a ceasefire.

Speaking on Air Force One as US President Joe Biden travelled to Italy for the G7 summit, Sullivan said many of Hamas’s changes to the plan were “minor and not unanticipated” but others “differ more substantively from what was outlined in the UN Security Council resolution which was adopted this week”.

“The United States will now work with the mediators specifically in Qatar to bridge vital gaps consistent with the president’s May 31 speech and with the contents of the UN Security Council resolution,” he said.

A 46-year-old man has been arrested at his home in Barnet, north London, as part of a criminal investigation into suspected offences committed in the procurement of contracts for personal protective equipment by the company PPE Medpro.

The person in question is currently being interviewed by National Crime Agency officers, according to the NCA.

Conservative peer Baroness Mone, a lingerie entrepreneur, has been at the centre of a scandal relating to allegations that she financially benefited from lobbying on behalf of PPE Medpro, which sold the government £200mn worth of personal protective equipment during the Covid-19 pandemic.

Apple’s market value surged past Microsoft’s on Wednesday, making it the world’s most valuable company, as investors warmed to the iPhone maker’s push into artificial intelligence.

Shares in Apple rose 3.7 per cent in early trading in New York, having climbed 7.2 per cent on Tuesday. Wednesday’s move pushed the company’s market cap to $3.28tn, above that of Microsoft, which is valued at $3.25tn. Nvidia, in third place, is valued at $3.05tn and briefly overtook Apple last week. 

Apple on Monday said it had partnered with OpenAI to integrate ChatGPT into its devices, easing investors’ concerns that the company was falling behind its competitors in the race to take advantage of generative AI. 

Abu Dhabi National Oil Company has given the green light to start work on a major liquefied natural gas export terminal, as the company looks to tap into the growing market for the super-chilled fuel.

The new project will more than double the LNG export capacity of the United Arab Emirates to 15mn tonnes a year. Adnoc said it had awarded an engineering, procurement and construction contract for the project worth $5.5bn to a joint venture between France’s Technip Energies, Japan’s JGC Holdings Corporation and UAE’s NMDC Energy.

The decision comes only weeks after Adnoc signed two overseas LNG deals. The state company sees gas and LNG, as well as renewable energy and petrochemicals, as its drivers of future growth.

Permira, one of Europe’s largest private equity groups, has named new leaders as part of a succession plan that will put two top dealmakers in charge of the group that holds €80bn in assets.

London-based Permira said Brian Ruder and Dipan Patel will become co-chief executives in September, taking over from Kurt Björklund who steered a revival of the buyout group since becoming its leader in 2008.

Ruder and Patel joined Permira in 2008 and 2009, respectively, when it was struggling to manage mistimed buyout bets. They have since steered successful tech and consumer investments.

Björklund, who will become executive chair, said the succession “begins the next chapter in our long history of successfully evolving our leadership and reflects our commitment to careful stewardship of the firm”.

US stocks opened at fresh record highs and Treasury yields dropped following the release of cooler than expected US inflation data on Wednesday, as investors bet on more interest rate cuts this year.

The S&P 500 was 0.9 per cent higher shortly after the open, while the Nasdaq Composite rose 1.2 per cent.

After Wednesday’s figures, traders in the futures market fully priced in two interest rate cuts this year, beginning in November, according to Bloomberg. Previously the average estimate was between one and two.

Traders also amped up bets on a September cut, putting the odds at 84 per cent, compared with a 60 per cent chance beforehand.

The two-year Treasury yield, which moves with interest rate expectations, fell to its lowest level since early April, down 0.16 percentage points to 4.68 per cent.

The gaps between Israel and Hamas on a US-backed ceasefire proposal are “bridgeable”, the US secretary of state said in Qatar on the latest stop in his shuttle diplomacy to help free Israeli hostages and end the war in Gaza.

At least some of the amendments that Hamas had demanded to the proposal were “workable, while some are not”, Antony Blinken said on Wednesday.

The changes have already been denounced by Israel as a rejection of the US and UN Security Council-backed proposal, which Blinken said had been endorsed by Israel.

“Hamas waited two weeks, and then proposed more changes — a number of which go beyond positions it has previously taken and accepted,” Blinken said. “As a result, the war that Hamas started will go on.”

Treasury yields fell and stock futures ticked up after the US’s cooler than expected inflation figures on Wednesday, as investors bet on more interest rate cuts this year. 

Traders in the futures market fully priced in two cuts this year following the report, compared with between one and two before the release, according to LSEG data. 

The two-year Treasury yield, which moves with interest rate expectations, fell to its lowest level since early April, down 0.13 percentage points to 4.71.

US inflation fell to 3.3 per cent in May, as Federal Reserve officials prepared to outline their plans for interest rate cuts this year.

The Bureau of Labor Statistics’ figure for the annual rise in consumer prices was lower than economists’ expectations that inflation would remain flat at 3.4 per cent.

Core CPI, which strips out changes for food and energy prices, hit 3.4 per cent, below expectations of a slight fall to 3.5 per cent.

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A woman has been jailed for 10 months for breaking a window at JPMorgan’s London headquarters in a protest over the bank’s role in providing financing to the fossil fuel industry.

Amy Pritchard, 39, became the first person to be jailed for a campaign that targeted banks across London after she was given a 12-month sentence, reduced to 10 months due to overcrowding, at the Inner London Crown Court on Wednesday.

Pritchard and four other women were found guilty of criminal damage after they broke three windows, causing £306,000 worth of damage, according to the bank, in 2021.

The other women were given suspended sentences and told to carry out unpaid community work. All five have lodged appeals.

US inflation: Federal Reserve rate-setters will take this morning’s important economic data into their policy meeting, which is expected to result in interest rates staying on hold. Economists expect the US consumer price index to have risen 0.1 per cent month on month in May, and 3.4 per cent on an annual basis. The “core” reading, which strips out volatile food and energy prices, is forecast to have increased 0.3 per cent on a monthly basis, while its annual rate is tipped to have eased to 3.5 per cent from 3.6 per cent.

Fed decision: The US central bank is expected to keep the federal funds rate at its range of 5.25-5.5 per cent following the conclusion of its two-day meeting. Investors will be looking to the Fed’s “dot plot” for clues on whether policymakers have shifted their expectations for easing policy this year, after a stronger than expected May jobs report led some economists to push back rate cut expectations. 

Presidential fundraisers: Donald Trump Jr will attend a Republican fundraising event in London for his father and presidential candidate, which is being organised by British property tycoon Nick Candy and his wife Holly Valance, a rightwing political activist. The Biden campaign will also hold a London fundraiser today that will be hosted by US Vogue editor-in-chief Anna Wintour.

Companies: Broadcom and Dave & Buster’s Entertainment report results after the bell.

French President Emmanuel Macron has launched an appeal for political rivals to rally his centrist platform to fight against an “extremist fever” on the far right and far left in upcoming parliamentary elections.

Macron dismissed reports he could eventually resign before his term was up in 2027 as absurd. “I believe in the strength of our institutions,” he said. 

He took aim at the far-right Rassemblement National, but also the far-leftist La France Insoumise in a press conference, saying those parties were building electoral alliances full of contradictions and unable to govern.

“Since Sunday night the masks are falling,” Macron said, hitting out at a call from the conservative Les Républicains leader Éric Ciotti on Tuesday to join forces with Marine Le Pen’s RN.

Emmanuel Macron has attacked France’s mainstream right and left for allying with “extreme” politicians, in his first press conference since his shock decision on Sunday to call a snap parliamentary election.

“In a few hours, the right has turned its back on the legacy of General [Charles] de Gaulle, Jacques Chirac and Nicolas Sarkozy,” the French president said on Wednesday.

Macron called the election in response to the crushing defeat inflicted on his centrist alliance by the far-right Rassemblement National party of Marine Le Pen.

He also said a far-right government would mean “exit from Nato”.

Brussels has announced tariffs on Chinese electric vehicle imports of up to 38 per cent, risking a trade war with Beijing as the EU tries to stem the rising tide of cheaper imports.

Tariffs will vary according to the brand, with the world’s largest EV producer BYD being hit with a 17.4 per cent levy. Carmakers that did not co-operate with an EU probe into Chinese subsidies would be hit by the 38 per cent tariff. This is in addition to an existing 10 per cent levy, according to a person familiar with the decision.

European Commission vice-president Margaritis Schinas said Beijing’s subsidisation of EV producers was causing “economic injury” to European manufacturers.

China’s trade ministry condemned the move. “China will take all necessary measures to firmly safeguard its legitimate rights and interests,” it said on Wednesday.

Starling Bank sharply increased the amount it set aside for bad loans as the neobank, which relied on government-backed schemes to build its loan book during the Covid-19 pandemic, deals with a rise in defaults.

Starling set aside £13.9mn for bad loans in the year to the end of March, a 40 per cent increase on the previous year as it flagged “increased default rates in the unsecured proportion of [small and medium businesses] lending”.

Pre-tax profits rose 55 per cent to £301mn in the period as the challenger bank’s total deposit base grew 4 per cent to £11bn. Revenues rose 51 per cent to £682mn.

European stocks rose early on Wednesday, erasing some of their recent losses, as traders looked ahead to key US inflation data and the Federal Reserve’s upcoming monetary policy decision.

The region-wide Stoxx 600 rose 0.4 per cent while Germany’s Dax added 0.5 per cent. London’s FTSE 100 rose 0.6 per cent after data showed UK economic growth stalled in April.

France’s Cac 40 added 0.3 per cent, having dropped sharply over the previous two sessions on concerns about the far right’s showing in the country’s upcoming legislative election.

Contracts tracking US stock indices were steady ahead of the New York open.

Australia is set to review regulation of the Big Four accounting firms after a senate inquiry, held in the wake of the PwC tax leaks scandal, called for greater oversight of the powerful consulting industry. 

The report, published by a senate committee that conducted months of hearings, argued that PwC, Deloitte, KPMG and EY operated in a “grey area of regulation” because of their partnership structure. A main recommendation was for the Australian Law Reform Commission to review the legislative framework and structure of large partnerships. That could open the door to Big Four consultants being regulated more like corporations. 

Other recommendations included a code of conduct to align consultants with public servants and a central register of breaches of conflict of interest.

Battery materials producer Umicore has issued a profit warning and will review its expansion plans because of a “sharp slowdown” in the pace of growth for electric vehicles.

The pullback in growth expectations has caused the unit, whose customers include Volkswagen and BMW, to lower its full-year profit forecasts to about break-even, down from €135mn previously. 

The Belgian group cited, among key factors, the scaling back of electrification plans for automakers in Europe, as well as the volumes for a Chinese car manufacturer not materialising this year.

“Our short-term outlook in battery materials is clearly disappointing,” said chief executive Bart Sap. “We are adapting our pace to this new reality and are taking the necessary actions to navigate the immediate challenges.”

Legal & General’s new chief executive António Simões has announced a sweeping restructuring of the FTSE 100 insurance and asset management group, putting its housebuilder up for sale, crunching its divisions and announcing an initial £200mn share buyback.

Simões, who joined the group in January from Santander, promised a “simpler, better-connected L&G” in a strategy update on Wednesday. This included creating a single asset management division, bringing together Legal & General Investment Management with its balance-sheet investment unit, and selling assets including its housebuilder Cala.

The group plans to double down on the market for corporate pension deals, by writing £50bn to £65bn in cumulative deals in the UK by the end of 2028. It inked £13.7bn worth of deals globally last year.

The UK economy stalled in April after a strong rebound in the first quarter of the year, as the wettest April for more than a decade hit the services sector and construction.

Gross domestic product was unchanged between March and April, matching analysts’ expectations, and was 0.7 per cent higher in the three months to April compared with the previous three-month period, the Office for National Statistics said on Wednesday.

The month of flatlining activity follows a rebound of 0.6 per cent in the first quarter that ended last year’s technical recession.

Shares of Chinese electric vehicle companies listed in Hong Kong dropped on Wednesday ahead of an announcement of new EU tariffs on the country’s EV exports.

Nio plummeted 7.9 per cent while Geely, which owns Volvo but has aggressively expanded into EVs, shed 5 per cent. Li Auto dropped 3.3 per cent and BYD, the world’s largest EV manufacturer, dropped 2.9 per cent.

Hong Kong’s benchmark Hang Seng index lost 1.3 per cent while mainland China’s CSI 300 index was flat. Cosco Shipping, one of the world’s largest container groups, extended losses as its mainland listing fell 3.4 per cent. It dropped more than 10 per cent on Tuesday.

India’s Nifty 50 climbed 0.7 per cent, hitting a record high after the country announced a new cabinet yesterday.

Simon Sadler, the founder of hedge fund Segantii Capital Management, appeared in a Hong Kong court on Wednesday in a case in which he is accused of insider trading.

Sadler attended a magistrates’ court for a short hearing at which the case was transferred to a higher court. Former Segantii trader Daniel La Rocca, accused of insider dealing alongside Sadler and the hedge fund itself, also attended.

The men spoke only to confirm they understood the case against them and were not asked to enter a plea.

Segantii has previously said it “intends to defend itself vigorously against the charge”.

Sadler and La Rocca did not comment when approached by the Financial Times in court.

China’s consumer prices edged up in May while factory prices remained mired in contraction, pointing to stagnant demand amid an ongoing property downturn in the world’s second-biggest economy.

The country’s consumer price index for May grew 0.3 per cent year on year, according to official statistics, the same as April’s figure and slightly less than a forecast by Reuters in a poll of economists of a 0.4 per cent increase. The CPI contracted 0.1 per cent on a month on month basis.

The producer price index, which measures changes in the price of industrial products, contracted 1.4 per cent year on year, slightly worse than expected, but a marked improvement from April’s 2.5 per cent decline.

Mainland Chinese equities extended a sell-off on Wednesday ahead of an EU announcement regarding raising tariffs on electric vehicle exports from China.

Zhongsheng Holdings, a leading Chinese multinational car dealership with a listing in Hong Kong, led losses as it dropped 3.4 per cent. EV company Li Auto and automotive group Geely, which owns Volvo, fell 2.5 per cent and 2.8 per cent, respectively.

The broader Hang Seng index shed 1.5 per cent.

Yesterday Chinese shipping groups, including Cosco Shipping and Orient Overseas, sold off ahead of the expected EU announcement.

Hong Kong authorities have cancelled the passports of six self-exiled activists who “absconded” to the UK, the city’s government announced on Wednesday.

According to the government statement, the six suspects, who include pro-democracy lawmaker and student activist Nathan Law, “continue to engage in acts and activities endangering national security”.

All six were already fugitives wanted on suspicion of breaking the territory’s national security law, imposed by Beijing in 2020.

Last year Hong Kong chief executive John Lee said, “We should treat those wanted by police . . . [especially those] who violated the national security law, as street rats that should be avoided”.

Events: The Morgan Stanley India Investment Forum begins. Singapore’s Prime Minister Lawrence Wong meets his Malaysian counterpart Anwar Ibrahim in Kuala Lumpur.

Economic data: China and India release inflation data for May. India also shares statistics on industrial and manufacturing output. Japan publishes figures on prices for corporate goods and South Korea announces its May unemployment rate.

Central banks: Thailand announces its decision on interest rates.

Corporate updates: Chinese medical device manufacturing powerhouse WuXi AppTec, which has come under scrutiny from US lawmakers, hosts its annual meeting. Japanese entertainment start-up Anycolor announces earnings. Australia’s Origin Energy holds its investor day.

Two men have been jailed for trying to evade US sanctions by selling Iranian oil to a Chinese customer, officials said on Tuesday.

Zhenyu Wang, a Chinese citizen, and Daniel Ray Lane, an American, both of McKinney, Texas, were sentenced to 45 months’ imprisonment.

Prosecutors said they hid the Iranian origins of 500,000 barrels of oil, which they intended to sell to a refinery in China.

The US has imposed sanctions on Iran since 2018, when Tehran pulled out of a nuclear deal. 

Tehran sold an average of 1.56mn barrels a day during the first three months of this year, almost all of it to China, according to consultancy Vortexa.

GameStop announced it had raised more than $2bn in a stock sale as it continued to ride the “meme stock” revival wave and stockpile cash.

The bricks-and-mortar video game retailer announced, after market close on Tuesday, that it sold the maximum number of shares registered under the at-the-market programme of 75mn shares, raising $2.1bn. 

GameStop announced plans for the latest sale last week, having pulled in $933mn last month.

After meme stock investor Roaring Kitty, who is known for leading retail investors to the stock in 2021, re-emerged in May, GameStop shares soared and were up 73.9 per cent so far this year as of Tuesday’s closing price of $30.49.

Apple shares soared to a record high, pushing the company’s valuation back above $3tn, in the wake of its decision to partner with OpenAI to roll out its new artificial intelligence system.

The stock closed 7.3 per cent higher at $207.15 on Tuesday for its biggest one-day jump since November 2022. Apple shares are now up 7.5 per cent so far this year.

The advance more than recouped the stock’s dip on Monday, which came after chief executive Tim Cook outlined upgrades to Apple’s software coming this year that will use AI to provide a smarter Siri voice assistant and more personalised features on its devices to enhance productivity.

Oracle forecast double-digit revenue growth in the year ahead as the software company said it expected strong demand for its artificial intelligence-powered cloud services.

Chief executive Safra Catz said she expected “each successive quarter should grow faster than the previous quarter”.

Analysts polled by LSEG expect revenue growth of about 9 per cent this fiscal year.

Catz said Oracle signed the “largest sales contracts in our history” in the third and fourth fiscal quarters, driven by “enormous demand for AI large language models in the Oracle Cloud”. 

Its shares were up 9.2 per cent in after-market trading in New York.

US stocks rose and Treasury yields fell on Tuesday ahead of key inflation data and the Federal Reserve’s outlook for interest rates due on Wednesday.

The blue-chip S&P 500 ended the day 0.3 per cent higher, while the tech-heavy Nasdaq rose 0.9 per cent.

Bond yields fell, with the two-year yield, which moves with interest rate expectations, down 0.06 percentage points to 4.83 per cent. The 10-year Treasury yield also fell, down 0.07 percentage points to 4.4 per cent after strong demand at an auction of $39bn of 10-year notes. 

The moves come as economists anticipate US price pressures to have eased in May.