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Stock markets recovered slightly after the core personal consumption expenditure index came in line with expectations.
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That leaves room for the Federal Reserve to make cuts this year.
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Interest rate cuts are also more likely after first-quarter GDP figures were revised downwards.
U.S. stocks reversed this week’s string of losses and recovered slightly after the Federal Reserve’s favorite inflation gauge met expectations and showed signs of cooling on Friday.
The lack of surprises in the Personal Consumption Expenditures index was welcomed by investors as it strengthened the chances of a rate cut this year. While indexes rose, 10-year Treasury yields fell by more than four basis points.
As predicted, core PCE rose 0.2% in April. On an annual basis, yields rose 2.8%, just above forecasts of a 2.7% gain.
Earlier this week, first-quarter GDP data was revised down due to softer consumer spending, adding more reasons why the Fed should eventually cut rates. The futures markets indicate that there will be at least one interest rate cut in September.
“The market has been concerned about inflation this year and there was a sigh of relief this morning when it came in no higher than expected. inflation rates,” said Chris Zaccarelli, Chief Investment Officer of Independent Advisor Alliance.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:
Here’s what else happened today:
In commodities, bonds and crypto:
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Oil prices rose. West Texas Intermediate crude rose 0.82% to $78.28 a barrel. Brent crude, the international benchmark, rose 0.54% to $82.89 per barrel.
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Gold rose 0.56% to $2,356 an ounce.
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The yield on ten-year government bonds fell by four basis points to 4.51%.
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Bitcoin rose 0.5% to $68,709.
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