US indices ended the day lower, despite market enthusiasm over the latest PCE data.
Overall and core personal consumption expenditures increased 2.6% year-over-year.
The stock market closed the first half of 2024 strongly, with the S&P 500 index up almost 15%.
U.S. stock prices fell on Friday after temporarily hitting new records as investors celebrated the latest inflation report.
The personal consumption expenditures price index, an inflation indicator favored by the Federal Reserve, fell to its lowest level in three years. Both the core PCE index and the overall index fell to 2.6% year-on-year in May, slightly lower than the previous month’s level.
Personal spending also picked up month over month, with spending on real goods rebounding after a weak April.
“The weak inflation data will help demonstrate that the Fed can begin to cut rates in the coming months,” said Jeffrey Roach, chief economist at LPL Financial. “As long as incomes are growing at a healthy pace, consumers will continue to spend. The key is the labor market and so now we should turn our attention to next week’s nonfarm payrolls release for a fresh look at the labor market.”
While this did not change expectations for monetary policy in May, investors remain confident about interest rate cuts this year. futures markets evaluate the chances of two
Low inflation wasn’t enough to keep indexes in the green through Friday, but the stock market still closed the first half of 2024 strong. Year-over-year, the S&P 500 gained 14.1%, outpacing the Nasdaq’s 16.6% gain.
“But there are still areas of relative weakness,” wrote Trade Nation senior market analyst David Morrison. “The old-fashioned Dow only managed to gain 4%, while the Russell only gained a measly 1%. Are they a harbinger of weakness to come, or will they take the place of market leaders in the second half?”
Among the current problems is a worrying bifurcation in the market, where only a handful of stocks are actually leading the index’s gains. At the same time, interest rates remain high amid signs of a slowing economy, while Nvidia stocks An increase of 430 billion dollars this week additional concerns about the long-term prospect of an AI-led bull run.
Here’s where the U.S. indices stood at 4 p.m. Friday:
Here’s what else is happening today:
In commodities, bonds and cryptocurrencies:
West Texas Intermediate Crude oil fell 0.53% to $81.3 per barrel. Brent crude oilthe international benchmark, fell 0.18% to $84.77 a barrel.
Gold slipped 0.12% to $2,326 an ounce.
The 10-year Treasury yield jumped 6 basis points to 4.349%.
Bitcoin remained essentially flat at $60,809.21.
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