Stock futures in the US are pointing towards gains as investors digest the latest inflation report, which is seen as crucial to the Federal Reserve’s next decision on interest-rate cuts. This news comes on the heels of the S&P 500 futures (ES=F) edging out a third record-high close this week, with Dow Jones Industrial Average futures (YM=F) and Nasdaq 100 futures (NQ=F) also seeing gains around 0.1%.
The August reading of the Personal Consumption Expenditures (PCE) index, the inflation metric favored by the Fed, showed continued cooling in price pressures. The “core” PCE index, which is closely monitored by the Fed, rose 0.1% month over month, falling below Wall Street forecasts.
Confidence in the economy has returned to the market, with solid GDP readings and continued cooling in inflation. This has led to growing conviction that the Fed can achieve a “soft landing” as it embarks on a rate-cutting campaign.
China has also added to its stream of stimulus measures, boosting markets once again. Mainland stocks saw their biggest weekly win since 2008, and luxury stocks are poised for their best week in years as hopes for Chinese demand rise. Stocks like Alibaba (BABA, 9988.HK), JD.com (JD, 9618.HK), and Meituan (3690.HK, MPNGY) saw surges amid the buying spree.
In individual stock movements, Costco (COST) stock slipped in premarket trading after the wholesale giant’s revenue disappointed Wall Street.
The latest reading of the Fed’s preferred inflation gauge showed that prices increased at a slower pace than expected on a monthly basis in August. The core Personal Consumption Expenditures (PCE) index, closely watched by the Federal Reserve, rose 0.1% from the prior month in August, below Wall Street’s expectations. Over the previous year, prices rose 2.7% in August, matching Wall Street’s expectations.
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