Inflation showed signs of cooling further on Friday, as Wall Street began pricing in further interest rate cuts from the Federal Reserve.
The Personal Consumption Expenditures Price Index (PCE), the Federal Reserve's preferred inflation measure, showed that prices for goods and services rose 2.2% last month, lower than the 2.3% year-over-year rate expected by economists.
Core inflation, which excludes volatile food and energy prices, rose 2.7%, in line with expectations and slightly higher than last month's 2.6%.
Moderating inflation toward the central bank's 2% target has given the Fed plenty of room to cut interest rates by 50 basis points last week and begin an easing cycle.
The focus going forward will be to prevent the unemployment rate from skyrocketing.
“Even if it's a small deviation from consensus, the Fed's recent shift in focus to employment means the market is less sensitive to inflation news,'' said ING Bank strategists. said.
This week's data shows the overall economy remains resilient, leaving traders uncertain about the Fed's next move.
There is a 50.8% chance the central bank will make a further move at its November meeting, according to CME Group's FedWatch tool.
49.2% of respondents said they wanted a 25bp reduction.
Stock futures edged lower early Friday morning as investors refrained from making big bets before the Commerce Department released PCE numbers.
Dow futures fell about 22 points, or 0.05%, the S&P 500 E-mini fell 7 points, or 0.12%, and the Nasdaq 100 E-mini fell 53.75 points, or 0.26%.
Futures tracking the Russell 2000 index, which tracks small-cap stocks, rose 0.2%.
On this day, the University of Michigan's final estimates for September on consumer sentiment and remarks by Federal Reserve Board Director Michelle Bowman are also attracting attention.
Federal Reserve President Lisa Cook said late Thursday that the central bank's unusual actions earlier this month could address growing “downside risks” to employment.
Wall Street's major indexes ended higher in pre-session trading, with the S&P 500 closing at a record high after Micron's positive outlook galvanized optimism about artificial intelligence.
The benchmark index, along with the blue-chip Dow and the tech-heavy Nasdaq, have been on an upward trend for the third consecutive week.
Among other stocks, Bristol-Myers Squibb rose 6% after the Food and Drug Administration approved a schizophrenia drug, giving patients a treatment option that alleviates symptoms of the mental disorder without common side effects. It skyrocketed.
Costco Wholesale's fourth-quarter sales fell 1.3%, falling short of market expectations due to cautious consumer spending on big-ticket items at members-only stores and falling gasoline prices.
Dollar General fell 2.1% after Citigroup downgraded the discount retail chain from “neutral” to “sell.”
U.S.-listed shares of Chinese companies such as Alibaba rose 0.7% and PDD Holdings rose 2.2% as China's central bank cut interest rates and injected liquidity into the banking system in its latest economic stimulus package. NetEase rose 2.1%, tracking domestic stocks.
Mining companies such as Albemarle are trading at 2.8 after reports that China's major cities, Shanghai and Shenzhen, plan to lift key restrictions that remain on home purchases in a bid to attract potential buyers. %, while BHP's US-listed shares rose 1%.
with post wire
