Stock market today: US indexes edge higher as cooling inflation data props up Fed rate-cut bets

Stock market today: US indexes edge higher as cooling inflation data props up Fed rate-cut bets

Traders work on the floor of the New York Stock Exchange.Spencer Platt/Getty Images

  • Stocks saw a slight rebound after the core personal consumption expenditure index came in line with expectations.

  • This leaves room for the Federal Reserve to cut spending this year.

  • Interest rate cuts are also more likely, following the downward revision of first quarter GDP figures.

U.S. stocks reversed this week’s losing streak, rebounding slightly after the Federal Reserve’s preferred inflation gauge met expectations and showed signs of cooling on Friday.

The lack of surprises in the personal consumption expenditures index was welcomed by investors as it strengthened the chances of an interest rate cut this year. As indexes rose, the 10-year Treasury yield fell more than four basis points.

As expected, core PCE rose 0.2% in April. On an annualized basis, it rose 2.8%, just above forecasts for a 2.7% gain.

Earlier this week, first-quarter GDP data was revised lower due to slowing consumer spending, adding another reason why the Fed may eventually need to cut interest rates. Futures markets indicate at least one rate cut should take place as early as September.

“The market has spent this year worrying about inflation and there was a sigh of relief this morning when it was not higher than expected and there might even be some good news in the report in “a slowdown in consumer spending could portend lower inflation numbers,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Here’s where the US indexes stood shortly after the 9:30 a.m. opening bell on Friday:

Here’s what happened today:

In commodities, bonds and cryptocurrencies:

  • Oil prices have increased. West Texas Intermediate Crude oil rose 0.82% to $78.28 per barrel. Brent crudethe international benchmark, gained 0.54% to 82.89 dollars per barrel.

  • Gold rose 0.56% to $2,356 an ounce.

  • The 10-year Treasury yield slipped four basis points to 4.51%.

  • Bitcoin rose 0.5% to $68,709.

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