US stocks rose on the last trading day of the quarter while a drop in Treasury yields deepened after the Federal Reserve’s preferred measure of inflation increased at a slower-than-expected pace.
(Bloomberg) — US stocks rose on the last trading day of the quarter while a drop in Treasury yields deepened after the Federal Reserve’s preferred measure of inflation increased at a slower-than-expected pace.
The S&P 500 climbed 0.7%, while the Nasdaq 100 advanced 1%. Treasury two-year yields, which are more sensitive to imminent policy moves, fell to 5.02%. The dollar slumped.
The core personal consumption expenditures price index, which strips out volatile food and energy, rose 0.1% in August, less than economists were expecting. Investors are looking for signs that pricing pressures are moderating and the central bank can eventually pivot from its high-rate regime.
“Inflation is continuing to decelerate, meaning the Fed’s aggressive campaign is working,” said Carol Schleif, chief investment officer at BMO Family Office. “The challenge is that core PCE remains almost double the Fed’s 2% target, prompting the Fed to keep the possibility of another rate hike in play.”
High rates around the globe have kept a lid on stocks of late. The July-September quarter has been the worst for MSCI’s all-country index since September 2022, as surging oil prices fanned fears over inflation and economic growth.
Key events this week:
- US consumer spending, wholesale inventories, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
- The S&P 500 rose 0.8% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 1%
- The Dow Jones Industrial Average rose 0.6%
- The Stoxx Europe 600 rose 1.2%
- The MSCI World index rose 0.8%
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.2% to $1.0588
- The British pound rose 0.3% to $1.2240
- The Japanese yen was little changed at 149.22 per dollar
- Bitcoin fell 0.3% to $27,004.09
- Ether rose 1% to $1,673.09
- The yield on 10-year Treasuries declined six basis points to 4.52%
- Germany’s 10-year yield declined 10 basis points to 2.83%
- Britain’s 10-year yield declined five basis points to 4.43%
- West Texas Intermediate crude rose 0.4% to $92.11 a barrel
- Gold futures rose 0.8% to $1,894.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck, Abhishek Vishnoi, Tassia Sipahutar and Sujata Rao.
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