The major equity indexes drifted in listless trading on Tuesday, with the U.S.-North Korea summit in the rear-view mirror and Wall Street now focusing its attention on the world’s various central bank decisions.

The summit and last weekend’s rancorous G-7 meeting have yielded the spotlight to central banks, with a seemingly certain Federal Reserve rate increase on Wednesday, plus the prospect of a hawkish European Central Bank tilt on Thursday. The Bank of Japan’s policy decision is due Friday.

While defense stocks such as Raytheon, Lockheed Martin and Northrop Grumman dipped, the broader markets saw little impact from the summit.

Data on Tuesday indicated that consumer prices rose marginally in May as gasoline price increases slowed and the underlying trend continued to suggest moderate inflation in the economy. Although the inflation figures were in line with estimates, look for the issue of four-hikes-in-2018 to resurrect itself following the Fed’s decision on Wednesday.

Meanwhile, AT&T and Time Warner can finally breathe a sigh of relief: A judge has approved the companies’ $85.4 billion merger. The Justice Department sued to block the merger back in November 2017, arguing that a combined AT&T-Time Warner would use its newfound leverage in ways detrimental to consumers. Those could include raising licensing fees, charging more for channels, or otherwise increasing costs for viewers.

Many analysts expect the Justice Department to file an appeal to prevent AT&T and Time Warner from closing the deal on Monday, the earliest it can close. Time Warner currently has until June 21 to complete the merger, but it could be extended. However, the judge urged the government not to seek stay of ruling which could force AT&T to pay break-up fee.

The Fed is widely expected to raise interest rates for the second time this year when it concludes its policy meeting on Wednesday. The key focus will be how the Fed characterizes its monetary policy, with the Street looking for hints if it would move to raise rates three or four times this year.

The S&P 500 utility index gained 1.3 percent and the technology index was up 0.6 percent, both of which helped S&P 500 index.

Tesla Inc shares chalked up a gain of 3.2 percent after announcing that it is cutting several thousand jobs across the company.

Twitter gained 5 percent after J.P. Morgan raised its price target on the stock by $11 to $50, saying it was confident about the company’s advertising revenue growth.

Approximately 6.4 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.6 billion share daily average over the past 20 trading days, according to Thomson Reuters data.

CPI Higher Meeting Expectations

Inflation accelerated in May to the fastest pace in more than six years, reinforcing the Federal Reserve’s outlook but at the same time eroding wage gains that remain relatively unchanged despite an 18-year low in unemployment.

According to a report by the Labor Department on Tuesday morning, its consumer price index (CPI) rose 0.2 percent from the previous month and 2.8 percent from a year earlier but was on target with prior median estimates.

The annual gain was the largest since February 2012 and follows a 2.5 percent increase in April. Excluding food and energy, the so-called core CPI was up 0.2 percent from the prior month and 2.2 percent from May 2017, also in keep with the median estimates of economists.

The pickup in headline inflation partly reflects gains in fuel prices, though the annual gain in the core measure was the most since February 2017.

The Fed is expected to raise borrowing costs this week for the sixth time in 18 months. At the same time, the rising inflation numbers will figure into policy makers’ thinking on the pace of increases for the second half and in 2019.

A separate Labor Department report on Tuesday indicated that the higher prices are not being reflected in average hourly wages after adjusting for inflation. Hourly wages were unchanged in May from a year earlier, even as nominal pay accelerated to a 2.7 percent annual gain from 2.6 percent in April.

For production and nonsupervisory workers, real average hourly earnings fell 0.1 percent from a year earlier.

Seasonally adjusted gasoline prices rose 1.7 percent in May from the previous month, after a 3 percent gain in April.

The May CPI number showed solid gains that could not be written off as the result of gasoline prices, cellphone-contract base effects or merely rent pressures — although these factors did contribute.

CPI service pressures exhibited a broad-based acceleration in most underlying categories, which is likely reflective of the ongoing pickup in labor costs. However, even though the core CPI is above 2 percent, it is not yet running at a pace consistent with 2 percent on the core PCE, the Fed’s preferred measure of inflation.

The shelter category, which accounts for about one-third of the CPI, rose 0.3 percent from the previous month, continuing a trend of steady increases. Owners-equivalent rent, one of the categories designed to track rental prices, advanced 0.2 percent. Lodging away from home, which includes hotel and motel rates, rose 2.9 percent in May, the most since August.

Energy prices rose 0.9 percent from previous month; food costs were unchanged. Costs for new vehicles rose 0.3 percent after a 0.5 percent decline in the prior month; used-vehicle prices fell 0.9 percent, the fourth straight drop. Air fares fell 1.9 percent after a 2.7 percent drop and apparel prices unchanged after 0.3 percent gain.

Expenses for medical care rose 0.2 percent. The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60 percent of the index covers the prices that consumers pay for services ranging from medical visits to airline fares, movie tickets and rents.

Oil Buffer Being Squeezed

The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption.

Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, thereby providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage.

That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23.

Some analysts believe that spare capacity could fall below 2 percent, after years of low oil prices drove down investment in new production across the industry.

Saudi Arabia, OPEC’s de facto leader which has indicated its support for hiking output at next week’s meeting in Vienna, has said it is alert to the potential squeeze on the market.

OPEC has been curbing supply since January 2017 to raise oil prices and cut swollen global inventories. The price of crude has since surged, climbing above $80 a barrel last month. However, the decline in inventories, which have now fallen back to around their five-year average in industrialized nations, adds to the conundrum facing OPEC.

Oil prices have faced one jolt already this year. A U.S. decision to pull out from an international nuclear deal with Iran and reimpose sanctions helped prices climb to their highest since 2014. Sliding Venezuelan output has added to supply concerns.

The precise level of spare capacity available depends in part on how it is defined. The Paris-based International Energy Agency (IEA), which bases its figures on oil production that can be brought onstream within 90 days and sustained for an extended period, estimates OPEC’s spare production capacity was 3.47 million bpd in April, with Saudi Arabia accounting for roughly 60 percent.

The U.S. Energy Information Administration (EIA), which defines it as production that can be brought online for 30 days and sustained for at least 90 days, put OPEC’s spare capacity at 1.91 million bpd in the first quarter.

Saudi Arabia, with the bulk of the world’s spare capacity, has said it would need 90 days to move rigs to drill new wells and raise production to 12 million or 12.5 million bpd. The kingdom’s output in May was about 10 million bpd.

Saudi Arabia could increase production beyond its stated output capacity of about 12.5 million bpd, possibly adding another 1 million bpd of what is known as surge capacity. The kingdom did this during wars in the Gulf and Iraq, but the surge in output was only sustained for a few months.