Home Business The Dow Jones gains as the Fed’s favorite inflation gauge cools

The Dow Jones gains as the Fed’s favorite inflation gauge cools

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The Dow Jones gains as the Fed’s favorite inflation gauge cools

Stocks were mixed Friday as investors embraced an inflation report seen as crucial to the Federal Reserve’s next decision on interest rate cuts.

The S&P 500 (^GSPC) rose 0.1% after hitting a third record high this week. The Dow Jones Industrial Average (^DJI) rose 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) fell just below the flatline.

The August Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, showed a continued cooling of price pressures. The “core” PCE index, the most closely watched by policymakers, rose 0.1% month-on-month, lower than Wall Street forecasts.

The PCE reading appeared to raise expectations for another Fed rate cut next month. More than half of traders – about 52% – now expect a 50 basis point cut.

Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards

Stock prices are on track for weekly gains after confidence in the economy returns to the market. A solid GDP figure, combined with a continued cooling of inflation, has bolstered growing belief that the Fed can make a soft landing as it begins a rate-cutting campaign.

Elsewhere, China expanded its suite of stimulus measures, giving markets another boost. Mainland stocks posted their biggest weekly gain since 2008, and luxury stocks are set for their best week in years as hopes rise for Chinese demand. Meanwhile, shares of Alibaba (BABA, 9988.HK), JD.com (JD, 9618.HK) and Meituan (3690.HK, MPNGY) rose during the buying spree.

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In other individual stock moves, shares of Costco (COST) fell in morning trading after the wholesale giant’s sales disappointed Wall Street.

Live4 updates

  • Costco shares are falling, but gold bars are selling like hotcakes

    Costco (COST) is slinging a lot of gold bars as prices for the precious metal continue to rise, Yahoo Finance’s Brooke DiPalma and Brian Sozzi report.

    Gold sales rose by “double digits” in the most recent quarter, the wholesale giant’s CFO Gary Millerchip told analysts during an earnings call Thursday evening. Millerchip added that gold was a “meaningful tailwind” for e-commerce sales in the quarter.

    Costco started selling gold bars in the fall of 2023. Wells Fargo analysts estimate that the company moves bars worth $100 million to $200 million every month.

    On its website, Costco sells its 1 oz gold bar for $2,679.99. You must be a member to purchase the precious metal. It is also non-refundable and there is a limit of five total units per membership.

    Despite strong gold sales, Costco’s bread and butter still sells products like, well, bread and butter to price-conscious consumers.

    In the fourth quarter of the fiscal year, same-store sales growth was 6.9%, compared to Wall Street estimates of 6.4%. E-commerce revenue rose 19.5%, slightly lower than the 19.63% growth rate analysts had forecast.

    Read more here

  • Stocks open higher as the inflation measure shows more cooling

    Shares continued to build positive momentum Friday morning as investors welcomed another update showing price pressures were easing. The encouraging inflation report boosted market expectations that the Federal Reserve could make another major rate cut at its next policy meeting in November.

    The S&P 500 (^GSPC) rose 0.1% after hitting a third record high this week. The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) each gained about 0.2%.

  • Intel shares rise on news of CHIPS Act funding talks and reports of an Arm offering

    Intel (INTC) shares rose 1.8% in early trading on Friday after the Financial Times reported that the chipmaker and the US government are on track to secure $8.5 billion in CHIPS Act funding for the company to close.

    Separately, Bloomberg reported that Arm Holdings (ARM) expressed interest in buying Intel’s product business.

    The potential bid from Arm, the British chip designer with high-profile partners including Google (GOOG) and Apple (APPL), was rebuked by Intel, unnamed sources told Bloomberg.

    Intel has also reportedly been approached by Qualcomm (QCOM) and investment manager Apollo to buy the company in its entirety. Shares of Intel have rallied over the past week on the news, but are still down more than 50% from the start of the year. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

    Rival Qualcomm has proposed a friendly takeover, according to the Wall Street Journal, but such a deal could face a backlash from antitrust regulators. Analysts have also raised doubts about whether a Qualcomm acquisition would make financial sense for Qualcomm or Intel.

  • The Fed’s favorite inflation gauge shows that prices rose less in August than Wall Street expected

    The latest reading of the Fed’s inflation gauge showed that prices rose more slowly than expected in August on a monthly basis.

    The ‘core’ personal consumption expenditure (PCE) index, which excludes food and energy costs, rose 0.1% in August from the previous month. The numbers, which are closely watched by the Federal Reserve, came in below the 0.2% expected by Wall Street and the 0.2% expected in July.

    Compared to the previous year, prices rose 2.7% in August, which matched Wall Street expectations and exceeded July’s 2.6%.

    Read more here.

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