Editor
Wall Street edged higher after the data showed progress on inflation and labor market conditions.
The U.S. stock moves positively this Friday as it reaches the midday trading sessions. The Bureau of Statistics released June’s PCE report, the most anticipated economic report this month. As expected, inflation is collapsing. In June, the U.S. PCE price index was down by 0.2%, scoring a 2.5% year-over-year increase. Furthermore, today the Department of Commerce reassessed the consumer spending index. The indic spending index enjoys two-thirds of the U.S. economy, and it shows that it slowed down a bit last month.
As the report shows, U.S. consumer spending rose by 0.3% in June. The unemployment rate rose to 4.1% last month. The commerce department also signaled that the consumer sentiment index rose by 0.3% in May, while it was down by 0.4% in the prior month. The economist at Reuters wrote in their note, “We remain comfortable with our forecast that cuts will start in December, but upcoming inflation and employment data could tip the scale to an earlier cut.”
Overall, the data reported today shows progress in terms of inflation and labor market conditions, which increases the probability of interest rate cuts in September. Next week, the market will turn its interest to the Fed meeting, which will more likely deliver some insights about the Fed’s policies and intentions regarding interest rates and market conditions. The U.S. Federal Reserve officials are expected to keep the interest rate at the usual rate of 25 basis points. On top of that, it is expected to signal a cut in September. Still, the main competitor is the labor market. The data shows that the unemployment rate was up to 4.1%, which could affect the labor market if the Fed raised key interest rates sooner.
Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, believes that the data will pave the way to restrain rising interest rates sooner. He says, “Everybody’s waiting to find out if the Fed is going to be confident enough to cut. If this doesn’t make the Fed confident enough, nothing will,” Brian added. “The economy is slowing, and if they don’t cut, it could screech to a halt. They do have some time because certainly there’s still some economic momentum, but that momentum is fading fast.”
Meanwhile, in the news of the individual stock market, Bristol-Myers Squibb rose over 7% after strong Q2 results. 3M Company soared 14% after raising its profit forecast, and Deckers Outdoor rose 10% after raising its annual profit forecast. DexCom slumped 40% after cutting its revenue forecast.
As of 12:29 a.m. ET New York time, Wall Street main indices were higher, but this week’s session will most likely end flat due to previous market declines. The S&P 500 benchmark was up by 1.3% to 5.447.90 basis points. The tech-heavy Nasdaq edged higher by 1.2% to 17.239.600 basis points, while the Dow Jones Industrial Average rose by 1.78% to 40.730.90 basis points. Additionally, the U.S. bond market declined this Friday, with the U.S. 10-year note yield falling to 4.196% and the 2-year note yield falling to 4.3853%.
