The US stock market continued its upward trajectory, along with its Asian counterparts, following news that the People's Bank of China has decided to lower its short-term interest rate. This is direct evidence that officials are increasingly concerned about the sluggish GDP growth and are ready to boost stimulus measures to accelerate economic recovery.

The People's Bank of China reduced the seven-day reverse repo rate by 10 basis points to 1.9%, marking the first rate cut since August 2022. The central bank is now more likely to lower the annual lending rate on Thursday. It is expected that banks will also reduce their lending rates shortly thereafter.

The actions taken on Tuesday highlight the heightened concern over China's economic slowdown. Recent data showed that inflation remained close to zero in May, manufacturing activity contracted, and the earlier recovery in the real estate market came to a halt. Rumors are growing that Beijing is considering a broad package of additional stimulus measures.

Premarket movers

Shares of Oracle surged over 5% in premarket trading after the company announced exceeding revenue and profit expectations for the fourth fiscal quarter. Meanwhile, CEO Safra Catz stated that she expects adjusted earnings per share for the first fiscal quarter to be between $1.12 and $1.16. Analysts had anticipated earnings of $1.14.

Apple declined by approximately 0.7% in premarket trading after UBS downgraded the stock from "buy" to "neutral" late Monday evening. The Wall Street firm stated that it expects demand for iPhone models to decline even with support from emerging markets.

Shares of First Horizon fell by 1.2% after JPMorgan revised its rating to "hold" from "buy," citing uncertain short-term prospects amid rising expenses.

Agricultural company Bungesaw its share price decline following news of its $8 billion merge deal with Dutch company Viterra in Rotterdam.

Home Depot gained 0.7% in premarket trading. The company confirmed that its earning projections for the 2024 fiscal year have declined, ranging from 7% to 13%.

On the technical side, demand for the S&P 500 remains quite high. Buyers still have a chance to continue the uptrend, but the bulls need to fiercely defend the level of $4,320, from which it may surge back to $4,350. An equally important task for the bulls will be maintaining control over $4,375, which would strengthen the bull market. In case of a downward movement due to reduced risk appetite ahead of the Fed meeting, bulls must act around $4,320. A breakout below that level will quickly push the trading instrument back to $4,290 and pave the way to $4,175.