Editor
Wall Street was mixed in the last trading session for this year’s first quarter, despite slowing inflation.
The stock market’s main indices traded in a mixed fashion despite the slowing inflation data. The Commerce Department released the previous month’s inflation report, and the released data shows that core service costs are slowing notably. Inflation in the U.S. rose less than market expectations the previous month, which supports the likelihood of June interest rate cuts.
To put some data into perspective, the U.S. PCE was up by 0.3% in February, slightly lower than market expectations of 0.4%. Annually, the PCE scored a 2.5% increase, which is lower than the previous month.
Other data covered by the report include goods prices, energy prices, and consumer spending.
The data was as follows:
Goods and energy prices rose by 0.5%, led by higher energy costs. Still, furnishing and other durable goods reminded me of Energy prices increased but remained subdued compared to the previous year, when energy costs reached their all-time high. Core inflation, excluding food and energy, on the other hand, projected an annual increase of 2.8% as of the end of February.
Moving to consumer spending, the data shows that consumer spending in the U.S. saw one of its best high records this year. Surging by 0.8%, boosted by a stringent labor market and increased wages. CPE represents a third of the U.S. economy, which makes last month’s gains the highest in the U.S. economy since January 2023.
Reacting to the data, market experts and Fed officials commented and said that, in light of the released report, the Fed will be able to keep on its soft landing strategy and move on to its inner cuts in June.
First, Jeffrey Roach, chief economist at LPL Financial, comments on the data and says, “Core services inflation is slowing and will likely continue throughout the year.” He also adds, “By the time the Fed meets in June, the data should be convincing enough for them to commence its rate normalization process.”
The U.S. Federal Receiver, Jerome Powell, commented on the latest inflation data and said, “Along the lines of what we would like to see, Jerome’s comments suggest that the inflation data till now has changed the same as the Fed officials, which will facilitate June’s interest rates a lot better. Additionally, the monetary policymakers need to proceed with cutting interest rates in June. For now and until May, the first interest rate benchmark will remain steady at 5.25%–5.50%.
Meanwhile, on Wall Street, as of 20:30 New York time, the S&P 500 benchmark was 0.11%, estimated by 5 basis points in the last session of this year’s first quarter. The index has recorded more than 8% gains this quarter, which will boost its gains in the remaining year.
The Dow Jones futures rose by 0.12%, the highest gain among the main three indices, while the tech-heavy composite declined by 0.12% to 16,379.60 basis points.
Moving to the energy sector, Bernt crude oil prices swing up and down, with the currency at +0.02% to $86,09 per barrel. The West Texas intermediate jumped by 2.5% to $84 per barrel, while natural gas prices rose slightly by 1.98% to $1,75 per gallon.
