Wall Street jumps after cooling US inflation data

[Pelican Press 0]

Wall Street jumps after cooling US inflation data

US stocks have risen broadly after an in-line inflation report strengthened hopes for interest rate cuts in September although Nike shares slumped after a dismal annual sales forecast.

The Commerce Department’s data showed personal consumption expenditures (PCE) price index – the Fed’s preferred inflation gauge – was unchanged on a monthly basis in May and rose 2.6 per cent annually, all along expectations.

Excluding the volatile food and energy components, the core figure increased 0.1 per cent month-on-month and 2.6 per cent annually.

Chances of a rate cut in September inched up to 68 per cent from 61 per cent before the data, as per LSEG FedWatch data.

“This is a perfect report – it gives the Fed the green light to cut in September, and sets the stage for the dovish rhetoric to continue,” said Jay Woods, chief global strategist at Freedom Capital Markets.

Traders held their bets of two cuts despite Fed projections of just one this year, hoping for a sustained downtrend in inflation and as the economy ******** susceptible to decades-high interest rate.

Megacaps including Apple, Nvidia and

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.com rose between 0.2 per cent and 1.2 per cent.

Most of the S&P 500 subsectors were higher, led by tech stocks.

The small-cap Russell 2000 rose 0.8 per cent to an over two week-high.

However, Nike slumped 17.1 per cent after forecasting a surprise drop in fiscal 2025 revenue, weighing on the broader consumer discretionary sector.

In early trading on Friday, the Dow Jones Industrial Average was up 133.28 points, or 0.34 per cent, at 39,297.34, the S&P 500 was up 16.64 points, or 0.30 per cent, at 5,499.51, and the Nasdaq Composite was up 42.09 points, or 0.24 per cent, at 17,900.77.

Richmond Fed president Thomas Barkin said he still wanted to proceed “deliberately” on policy and the Fed’s Mary Daly said the latest data was “good news that policy is working”.

Comments from Fed official Michelle Bowman are also expected during the day.

Investors also geared up for the final reconstitution of the Russell benchmark indexes during the day, with the furious rally in AI-related stocks expected to leave an outsized imprint on their final shape.

Both the S&P 500 and the Nasdaq were set for gains in a week marked by a short-lived rout in AI-related stocks,

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.com hitting $US2 trillion ($A3 trillion) market value for the first time, quarterly earnings from the likes of FedEx and Micron Technology and a mixed bag of economic data.

The two indexes were set for quarterly gains.

However the blue-chip Dow was on pace to end the quarter down 1.0 per cent, highlighting the divergence between the more tech-heavy indexes and the rest of the market.

Trump Media & Technology Group gained 4.0 per cent after a shaky performance from Democratic incumbent Joe Biden in the first presidential debate.

Optical networking gear maker Infinera jumped 18.4 per cent after Nokia said it would acquire the company in a $US2.3 billion deal.

Advancing issues outnumbered decliners by a 4.16-to-1 ratio on the NYSE.

Advancing issues outnumbered decliners by a 2.18-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and one new low while the Nasdaq recorded 35 new highs and 38 new lows.

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