US Futures Rise on Softer Inflation Data

US stock futures extended gains on Wednesday, with S&P 500 and Nasdaq 100 futures up 0.3% and Dow futures gaining 130 points, as a cooler-than-expected inflation reading boosted hopes that the Federal Reserve may not raise interest rates again as soon as next month. The PCE price index rose 0.3% in August, below expectations of 0.4%, while the core reading increased 0.2%, also below forecasts of 0.3%. On an annual basis, headline PCE inflation stood at 3.4%, below expectations of 3.7%. Separately, a final reading of Q2 GDP showed the US economy expanded 2.2%, compared with an earlier estimate of 1.5%, while the ADP employment report showed the private sector added more jobs than expected in September. Markets are now pricing in around a 47% chance of a 25 bps rate hike in October, down sharply from 70% last Friday.