*

Apple ( AAPL ) overtakes Microsoft ( MSFT ) in market value

*

May CPI data unexpectedly flat

*

Fed policy announcement due at 2 p.m. ET

*

Oracle up on double-digit FY25 revenue growth forecast

*

Indexes up: Dow 0.70%, S&P 1.07%, Nasdaq 1.63%

(Updated at 9:55 a.m. ET/1355 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 12 (Reuters) -

The S&P 500 and the Nasdaq jumped to record highs on

Wednesday after softer inflation data lifted hopes for a rate

cut by the Federal Reserve, while Apple ( AAPL ) overtook Microsoft ( MSFT ) as

the world's most valuable company.

Apple's ( AAPL ) shares climbed 3.7% to hit a record high and

dethrone Microsoft ( MSFT ) for the first time in five months, with the

iPhone maker's market valuation rising to $3.24 trillion versus

Microsoft's ( MSFT ) $3.23 trillion.

The latest spurt came soon after Apple ( AAPL ) launched its

artificial intelligence-integrated products on Monday, when it

sprinted past AI chip powerhouse Nvidia's ( NVDA ) $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%.

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 certainly seems as if the trend in inflation

continues to be our friend, working its way lower and taking the

Street by surprise... that is going to end up working in favor

of the Fed," said Sam Stovall, chief investment strategist at

CFRA Research.

The focus now turns to the Fed's policy announcement, due

later in the day.

Rate-sensitive megacap stocks rose as Treasury yields

fell, with Microsoft ( MSFT ), Alphabet and Nvidia ( NVDA )

up between

1.3

% and

2.8

%. An index tracking chip stocks jumped to an

all-time high.

Rate-sensitive real-estate stocks led sectoral

gains, while the small-cap Russell 2000 Index rose

2.7

%.

With rates overwhelmingly expected to remain unchanged,

markets will focus primarily on Fed Chair Jerome Powell's press

conference and the central bank's updated Summary of Economic

Projections, particularly the "dot plot", which shows where

policymakers expect interest rates to stand this year and long

term.

At

9:55

a.m. ET, the Dow Jones Industrial Average

was up 269.64 points, or 0.70%, at

39,017.06

, the S&P 500

was up 57.32 points, or 1.07%, at

5,432.64

, and the Nasdaq Composite

was up 283.54 points, or 1.63%, at

17,627.09

.

Among others, Oracle gained 12.2% after forecasting

double-digit revenue in fiscal year 2025 after the bell on

Tuesday.

U.S.-listed shares of electric-vehicle maker Nio

slipped 2.5% after a report that the European Commission will

levy extra tariffs on imported Chinese EVs.

Paramount Global ( PARAA ) fell

2.3

% after Shari Redstone,

ended talks for a potential merger

with David Ellison's Skydance Media.

Advancing issues outnumbered decliners by a 6.83-to-1 ratio

on the NYSE

,

and by

a 3.75-to-1 ratio on the Nasdaq

.

The S&P index recorded

33

new 52-week highs and

no

new lows, while the Nasdaq recorded

74

new highs and

22

new lows.