PCE inflation better than expected, S&P 500 futures recoup losses
The US personal consumption expenditures (PCE) inflation reading came in better than expected. Immediately after the release, S&P 500 futures erased their intraday losses, and interest rate expectations also reacted immediately.
The US personal consumption expenditures (PCE) inflation reading was released. The result was better than the level the market had feared. Core PCE, a key inflation measure, was also released.
Stock futures moved sharply immediately after the PCE release. S&P 500 futures recouped some or all of their intraday losses. Market participants adjusted their positions immediately after the release.
A shift in interest rate expectations was also detected. Short-term rates and rate expectations were volatile immediately after the release. The bond and dollar markets also reacted immediately.
PCE is the inflation indicator favored by the Federal Reserve. This release was presented as data that markets would refer to in relation to the Fed’s future policy decisions. The Fed’s public comments and additional economic indicators have become important.
Trading that day was also affected by corporate earnings and other economic indicators, in addition to the inflation report. Repeated short-term fluctuations were observed across the market. The final close reflected the interaction of several factors.
Investors are tracking upcoming employment data and the schedule of remarks by Fed officials. Additional inflation indicators and economic data are due to be released. The market may remain volatile ahead of the next major economic indicator.
Sources: Yahoo Finance
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