The final results indicate that the benchmark Dow Jones Industrial Average gained 0.65%, the tech-heavy Nasdaq advanced 0.44%, and the broad S&P 500 rose 0.59%.
“Investors breathed a sigh of relief after learning” the PCE index, related to personal consumption expenditures, a key indicator used by the Fed to gauge price behavior, commented Sam Stovall of CFRA in statements to AFP.
In August, the year-over-year price increase was 2.7%, up from 2.6% in July, according to the Department of Commerce.
Even though it was the highest since February, this rate of inflation did not unsettle investors.
This “does not change the forecasts of two rate cuts” in October and December, totaling half a percentage point, added Stovall.
A monetary policy easing is conducive to stimulating economic activity and corporate profits, perspectives that are “positive” for the market, he noted.
Core inflation, which excludes volatile indexes such as energy and food, in the U.S. remained stable compared to the previous month, with a year-over-year rate of 2.9%.
Meanwhile, consumer dynamism continues to withstand the price increases.
Investors are now awaiting further information related to the labor market next week, such as the non-farm payroll data on Friday.
These figures will be particularly scrutinized after the Fed decided last week to cut the benchmark interest rate for the first time since 2024 in response to weakening job market conditions.
