S&P 500 giving back gains into the close, Fed and US CPI eyed

• Wall Street has pared gains toward the close ahead of the CPI and the Fed.
• Markets see a 72% chance of the US central bank holding interest rates.

US stocks have pared gains towards the close on Friday, with the S&P 500 unable to hold onto the made. At the time of writing, the index is up some 0.27% after rallying from a low of 4,279.10 to a high of 4,322.20, falling back to 4,303 currently.

The benchmark S&P 500 closed Thursday 20% above its Oct. 12 finishing low and is holding up high on the session in what has been heralded as the start of a new bull market as defined by some market participants.

Stocks have benefitted from the sentiment surrounding the Federal Reserve with the making seeing a 72% chance of the US central bank holding interest rates at the current 5%-5.25% range in its June 13-14 policy meeting, according to CMEGroup's Fedwatch tool. This makes for an important Consumer Price Index data on Tuesday which will help potentially shape expectations around further moves by the Fed.

''Given Powell’s bias toward a pause in June, we expect the FOMC to keep the target range for the federal funds rate unchanged this month,'' analysts at Rabobank explained.

''However, the stronger-than-expected economic data have already convinced about half of the FOMC that additional rate hikes are warranted. Meanwhile, the anticipated tightening of credit conditions has yet to materialize and provide a substitute for rate hikes. Therefore, we expect the FOMC to leave the door to a July rate hike wide open to convince the hawks to skip June,'' the analysts said. ''For now, we expect one rate hike of 25 bps before the FOMC takes a pause for the remainder of the year.''