June 12 (Reuters) - U.S. stocks rose broadly on Wednesday, with the S&P 500 and the Nasdaq touching fresh record highs after softer inflation data lifted hopes for central bank rate cuts, while Apple overtook Microsoft to become the world's most valuable company.
As the focus shifts to the Federal Reserve's policy announcement, markets will zero in on Chair Jerome Powell's press conference and the Fed's updated "dot plot", which shows where policymakers expect interest rates to stand this year and long term.
Interest rates are overwhelmingly expected to remain unchanged at the meeting.
Meanwhile, Apple's shares climbed 4.4% to hit a record high, dethroning Microsoft for the first time in five months, as the iPhone maker's market valuation rose to $3.24 trillion versus Microsoft's $3.23 trillion.
The latest spurt came soon after Apple launched its artificial intelligence-integrated products on Monday, sprinting past AI chip powerhouse Nvidia's (NVDA.O), opens new tab $3 trillion valuation.
Risk sentiment was boosted after a Labor Department report showed the Consumer Price Index was unchanged on a monthly basis in May, when it was expected to rise 0.1%. On an annual basis, inflation rose 3.3%, lower than economists' expectation of a 3.4% increase.
CPI, excluding volatile food and energy prices, rose 0.2%, compared with an expectation of a 0.3% rise, while core inflation rose 3.4% on an annual basis versus a forecast of 3.5%.
"This continues the process of inflation slowly coming down. The $64,000 question is, going forward, how quickly it will keep coming down," said Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute.
Markets boosted expectations for a September start to rate cuts after the data, pricing in an over 70% chance, according to the CME's FedWatch tool, from 54% prior to the report.
"It still comes down to when the cuts start and how many times they (the Fed) will cut, and in our opinion, the market's probably being too exuberant," Samana said.
Rate-sensitive megacap stocks rose as Treasury yields fell, with the S&P 500's information technology (.SPLRCT), opens new tab and an index tracking chip stocks (.SOX), opens new tab at all-time highs.
Real-estate stocks (.SPLRCR), opens new tab rose to an over three-week high, while the small-cap Russell 2000 Index (.RUT), opens new tab jumped 2.7 %.
At 12:04 p.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab was up 106.95 points, or 0.28%, at 38,854.37, the S&P 500 (.SPX), opens new tab was up 59.77 points, or 1.11%, at 5,435.09, and the Nasdaq Composite (.IXIC), opens new tab was up 302.32 points, or 1.74%, at 17,645.87.
Among others, Oracle (ORCL.N), opens new tab gained 11.7% after forecasting double-digit revenue in fiscal year 2025 after the bell on Tuesday.
U.S.-listed shares of electric-vehicle maker Nio slipped 0.8% after the European Commission announced extra tariffs on imported Chinese EVS.
Paramount Global (PARA.O), opens new tab fell 0.2% after Shari Redstone ended talks for a potential merger with David Ellison's Skydance Media.
Advancing issues outnumbered decliners by a 5.55-to-1 ratio on the NYSE, and by a 2.85-to-1 ratio on the Nasdaq.
The S&P index recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 90 new highs and 45 new lows.
Reporting by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Pooja Desai
