US stocks rally as cooler PCE inflation data fuels Fed rate cut hopes
US stock futures rose, with S&P 500 E-mini futures gaining about 0.4%, after the August PCE report showed inflation rose 0.3% month-on-month, below the 0.4% estimate. The annual rate was 2.6%, below the 3.7% forecast.
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22% Welcome to the home for real-time coverage of markets brought to you reporters. You can share your thoughts with us at Cooler Than Expected Pce Adds Some Steam To Us Stock Futures US stock futures moved higher after a fresh batch of economic data, led by a softer-than-expected reading on the Fed's preferred inflation gauge. 1% before the data hit. The latest PCE report gave investors some encouraging news on the inflation front.
7% Reuters poll forecast. Core PCE, which excludes food and energy, also came in softer than expected. 3% consensus estimate. The inflation data was accompanied by signs the economy remains on reasonably firm footing.
5% Reuters poll estimate, while September ADP private payrolls rose 90,000, topping forecasts for 70,000. Fed rate expectations have changed somewhat after the reports. According to CME's FedWatch tool, traders now see a 63% chance the Fed leaves rates unchanged at its October 27-28 meeting, up from 55% before the release. The odds of a quarter-point hike eased to 37% from 45%.
Looking further ahead, markets are pricing in about 29 basis points of additional tightening through the end of 2026, down from roughly 32 basis points before the data. 24% immediately before the release. 255%. Most major S&P sector ETFs are trading higher in premarket action.
6%, while healthcare and consumer discretionary are the only sectors modestly in the red. 5%. m. EDT.
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