Nasdaq and the S&P 500 opened higher on Friday due to a better-than-expected PCE report.
It’s inflation data week, and U.S. investors’ worries cooled down after a positive inflation report. Meanwhile, in the Eurozone, inflation is still rising and relatively higher.
Wall Street’s main indexes opened higher for the third day in a row, despite fears of the banking crisis and its effect on corporations and the economy as a whole.
As of 13:20 ET, the Wall Street indexes were as follows:
The S&P 500 benchmark was up by 0.85%, and the Nasdaq composite jumped by 1.1%, boosted by gains from Tesla, which roughly added 4%. Alphabet Inc., Meta, and Amazon’s price share jumped by an average of 1.2%.
The Dow Jones industrial average industrial future rose by 0.79 percent, while the U.S. 10-year Treasury yields kept declining, and today the bonds fell by 1.1%.
Increasing inflation, higher interest rates, plus the banking crisis and its unknown effects on the market These three factors are currently moving the market, and other political factors such as China and Russia are getting closer in terms of economic and political partnership.
By the next month, China announced that it will start trading oil in its local currency, the Chinese yen. This movement could weaken the U.S. dollar against other peers and, in the long term, even demolish its decades of dominance.
Oil prices, on the other hand, rose despite the announcement, with the increase mainly boosted by slowing inflation data.
On Friday morning, the Commerce Department released its monthly consumer consumption expenditure report (PCE). The report shows a cooling down In February, PCE indexes were compared to the previous close and market expectations.
The U.S. CPI index rose by 0.3% compared to the previous month’s close of 0.6% and the expert’s forecast of 0.5%. The data board Wall Street and the stock market gains for today’s session raise investors’ hopes for a pause in interest rates in the future.
Since the Silicon Valley bank failure, the Federal Reserve has become more cautious, especially with interest rates. Its officials say they are closely monitoring the data and will account for everything by the next meeting. It’s unlikely that the FED will return to raising its key interest rates by 50% in the next meeting. However, marketers hope for a pause, or at least until the financial system is well-secured from future failures.
Elsewhere, the Eurozone’s inflation posted a 6.9% year-over-year increase, whereas energy prices eased pressure on living costs.
Based on the report released by the EU statistical agency Eurostat, the inflation rate in Europe fell from a previous high of 8.5% to its current level of 6.9%. As for energy inflation, the index fell from 13.7% to 0.9% since February last year.
Increasing inflation and high energy prices caused massive pressure on living costs in the EU zone.
That said, considering the banking crisis, central banks are trying to bring down inflation to its pre-pandemic levels without causing a severe economic reaction.