U.S. Stocks Rise — Slowing Inflation Has Dampened Expectations of a Fed Rate Hike
Photo: X / NYSE
Major U.S. stock indices rose during trading on September 30. The market reacted to the release of data on the Federal Reserve’s (Fed) preferred inflation gauge—the Personal Consumption Expenditures (PCE) price index, according to Bloomberg. According to data from the U.S. Bureau of Economic Analysis, it slowed on a year-over-year basis in August and came in below economists’ forecasts.
Against this backdrop, the S&P 500 gained 0.6%, the Nasdaq Composite jumped 1%, and the Dow Jones is up 0.19%.
The latest inflation data have reinforced market participants' expectations that the central bank will not raise interest rates in October, according to Bloomberg. According to the CME’s FedWatch tool, while investors had previously assessed the likelihood of a Fed rate hike at its upcoming October meeting as 50-50, that probability fell to 34.9% following the release of the August PCE estimate.
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