All articles tagged with #pce inflation
The core PCE inflation rate aligned with expectations, supporting the likelihood of a Fed rate cut on October 30. Market futures rose slightly, and economic indicators such as consumer spending and jobless claims suggest a resilient economy, with the S&P 500 remaining close to its record high despite recent declines.
The stock market experienced a sharp decline, with the tech-heavy Nasdaq dropping significantly and the Dow and S&P 500 also falling after the PCE inflation report, leading to a weekly decline in stocks.
The core PCE inflation rate in July matched expectations at 2.9%, supporting the Fed's potential rate cuts, with markets pricing in an 87% chance of a September rate cut and a continued bullish trend in the stock market despite some volatility.
This week is pivotal for the markets, with Nvidia's earnings serving as a key indicator for AI and tech sectors, the Fed's inflation data influencing rate cut expectations, and a busy schedule of economic and international earnings that could impact market direction and sector leadership.
The stock market experienced a decline during the witching hour amid upcoming Powell testimony and PCE inflation data, with investors cautious about economic indicators and Federal Reserve signals.
The recent PCE inflation data showed minimal month-to-month increases and a further slowdown in annual inflation, driven by unprecedented drops in financial and recreation services indices, which are expected to rebound sharply. The core services inflation remains significant in other categories, and the market-based PCE index indicates a potential acceleration in inflation, with the Federal Reserve likely to address these volatile components in upcoming discussions.
The core PCE price index, a key inflation measure for the Federal Reserve, rose 0.3% in October, aligning with forecasts and raising the 12-month core inflation rate to 2.8%. This increase complicates the likelihood of a December rate cut, with market odds for a cut rising to 66.5%. Personal income and spending also saw increases, with income rising 0.6% and spending 0.4%. The S&P 500 dipped slightly following the report, reflecting investor uncertainty about the Fed's next move.
This week, markets will be closed on Thursday for Thanksgiving, with bond markets closing early on Friday. Key economic data releases include the October PCE inflation index, third-quarter GDP revision, and November Fed meeting minutes. Earnings reports from tech companies like Dell, HP, and CrowdStrike are also expected. These events will provide insights into inflation trends, economic growth, and corporate performance amid a holiday-shortened trading week.
U.S. markets are on edge ahead of Friday's PCE inflation update, with mixed economic signals and political news, including Trump's conviction, adding to the uncertainty. The Federal Reserve remains cautious about easing interest rates despite some disinflationary signs. Global markets are also focused on U.S. inflation, with additional attention on euro zone inflation and China's economic struggles.
The October PCE inflation report is expected to show a mild increase in the core rate of inflation, which excludes food and energy. If the forecast is accurate, the annual increase in core inflation would slow to around 3.5%, the smallest increase since April 2021. While the Fed has raised interest rates to slow the economy and curb inflation, there is uncertainty about whether further rate hikes are necessary. Most Fed officials and investors believe that current interest rates are sufficient, but the central bank remains cautious and vigilant against any potential uptick in prices. The PCE report will be released on Thursday morning.
Dow Jones futures were little changed as the stock market rally attempt gained modest gains. Investors are awaiting the release of the PCE inflation report and the possibility of a government shutdown. Tech stocks like Meta, Nvidia, and Uber are worth watching. Nike stock surged after reporting higher-than-expected earnings. The stock market rally could gain momentum with a follow-through day next week.
The key measure of inflation, the personal consumption expenditures (PCE) price index, increased by 3.3% in July, raising the possibility of the Federal Reserve raising interest rates again this year. Consumer spending also accelerated, which could maintain upward pressure on prices. The core PCE inflation, which excludes volatile food and energy items, climbed to 4.2%. The report shows a slightly bigger monthly pickup in inflation compared to the consumer price index (CPI). Prices of services such as healthcare and transportation advanced more dramatically. The increase in spending and a sturdy economy may lead the Fed to raise interest rates again, although consumption could slow as Americans resume student loan repayments and deplete pandemic-related savings.