Stocks Rebound as inflation Data Brings Relief
on Friday, stocks saw a positive start as the market responded to the latest U.S.inflation figures. The Dow surged over 350 points, while the S&P 500 adn Nasdaq Composite also gained.
The Commerce Department reported that the personal consumption expenditures price index for August rose by 0.29% annually. This key inflation measure, favored by the Federal Reserve, matched economists’ expectations. The core PCE, excluding food and energy, increased by 0.2% month over month, also in line with forecasts.
These numbers brought some relief to Wall Street after three days of declines. Investors now anticipate two more quarter-point rate cuts in 2025, with the Fed’s next meetings in October and December.
David Russell,TradeStation’s global head of market strategy,noted that recent jobs claims and GDP revisions had previously shaken investor confidence. However, the latest core PCE data has helped calm the markets.
Top economist Mohamed El-Erian, an Allianz advisor, said, “Today’s U.S. economic data confirms a strong economy, with the Fed’s preferred inflation gauge (PCE) near 3%.” He added that this level of inflation is not likely to unsettle long-term expectations.
While major U.S. stock indices showed an upbeat opening, Bitcoin (BTC) remained weak, trading below $110,000. Gold prices, on the other hand, held near record highs.
