6/3/24 Key Financial Developments at the Start of June 2024

As we enter June 2024, several pivotal financial events are making headlines, influencing markets and individual financial decisions. Here’s a roundup of the latest financial news:

Federal Reserve Holds Rates Steady, Projects Future Cuts

In a highly anticipated move, the Federal Reserve has decided to maintain the federal funds rate at 5.25%-5.50%, marking the third consecutive pause in rate hikes. This decision follows a series of aggressive rate increases over the past year aimed at curbing inflation. The Federal Open Market Committee (FOMC) has projected three rate cuts in 2024, each by 25 basis points, potentially lowering the total rate by 75 basis points by the end of next year. This policy stance suggests that the central bank believes inflationary pressures are easing, allowing for a more accommodative monetary policy moving forward​

The announcement has had a positive impact on the stock market, with the Dow Jones Industrial Average closing at an all-time high of over 37,000 points following the Fed’s announcement. Investors are optimistic about the potential rate cuts, which could stimulate economic activity and improve corporate profitability.

NVIDIA Reports Record Quarterly Revenue

NVIDIA, a leading technology company, has reported a remarkable financial performance for the first quarter of fiscal year 2025. The company achieved record quarterly revenue of $26.0 billion, which represents an 18% increase from the previous quarter and a staggering 262% rise from the same period last year. This growth has been driven primarily by the booming demand in its Data Center business, which alone generated $22.6 billion in revenue, up 23% quarter-over-quarter and 427% year-over-year.

Additionally, NVIDIA has announced a ten-for-one forward stock split effective June 7, 2024, and a 150% increase in its quarterly cash dividend to $0.01 per share on a post-split basis. This strategic move aims to make the stock more accessible to a broader range of investors and reflects the company’s robust financial health​ (NVIDIA Investor Relations)​.

Regulatory Changes in the Buy Now, Pay Later (BNPL) Sector

The Consumer Financial Protection Bureau (CFPB) has introduced new regulations requiring Buy Now, Pay Later (BNPL) services to comply with U.S. credit card laws. This interpretive rule mandates BNPL providers to offer consumers protections similar to those provided by credit card issuers. These include investigating customer disputes, issuing refunds for returned items, and providing periodic billing statements. The rule aims to enhance consumer protections as BNPL services have seen rapid growth but previously operated in a regulatory gray area​.