LIVE MARKETS-S&P, Nasdaq rise as inflation data back rate easing hopes
The S&P 500 and Nasdaq are rising as inflation data supports hopes of rate easing. The Dow is slightly down. The personal consumption expenditures (PCE) price index rose in line with expectations, but concerns arise from the "supercore" inflation measure. Communication services and real estate sectors are gaining, while healthcare is the biggest loser. Bitcoin continues to rise, and the market has priced in a higher chance of a rate cut in June. All three major Wall Street indexes are on track for their fourth consecutive monthly gain.
Nasdaq up ~0.7%, S&P 500 gains ~0.3%, Dow edges red
Real Est leads S&P 500 sector gainers; healthcare weakest group
Euro STOXX 600 index up ~0.2%
Dollar, crude dip; gold rises; bitcoin up >4%
U.S. 10-Year Treasury yield falls to ~4.23% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at
S&P, NASDAQ RISE AS INFLATION DATA BACK RATE EASING HOPES
The S&P 500 (.SPX) and the Nasdaq (.IXIC) are gaining on Thursday as a key inflation measure favored by the Federal Reserve came in line with market forecasts, bolstering hopes the U.S. central bank will start cutting interest rates by the middle of the year.
The Dow (.DJI) , however, is down slightly on the day.
The personal consumption expenditures (PCE) price index rose 0.3% last month, bang in line expectations. In the 12 months through January, PCE inflation rose 2.4%, the smallest year-over-year increase since February 2021 and followed a 2.6% advance in December.
But Fed Chair Jerome Powell’s favorite “supercore” inflation measure - core services excluding housing rents - climbed 0.6% month-over-month in January, up from 0.1% the prior month, clocking in the strongest gain since December of 2021. That number has raised some concern in the market and something to track going forward.
“A single datapoint doesn’t make a trend. January data includes an annual cost-of-living adjustment that can lead to some data volatility,” said Michelle Cluver, senior portfolio strategist, at Global X in emailed comments.
“As such, the Fed is likely to look past this month’s data while assessing if inflation is moving onto a more sustainable trajectory to their target. This puts greater emphasis on the February and March inflation and labor data as markets assess the probability of June being the first interest rate cut.”
Communication services (.SPLRCL) and real estate (.SPLRCR) are leading S&P 500 sector gainers, while healthcare (.SPXHC) is the biggest loser so far.
Major crypto firms such as Coinbase Global (COIN.O) and MicroStrategy (MSTR.O) are up, as bitcoin (BTC=) continues its upward climb toward possibly another record high above $69,000.
All three major Wall Street indexes are on pace for their fourth consecutive monthly gain, led by the tech-heavy Nasdaq, amid robust quarterly earnings and a stellar rally driven by optimism around artificial intelligence.
Post-data, the rate futures market has now priced in a 67% chance of a rate cut in June, up from about 64% late on Wednesday, according to LSEG’s rate probability app.
The market has also factored in about three rate cuts, in line with the Fed’s guidance in its so-called “dot plot”.
Here is a morning snapshot of different assets across financial markets:
(Gertrude Chavez-Dreyfuss)
FOR THURSDAY’S EARLIER LIVE MARKET POSTS:
SO LONG TESLA, NVIDIA IS THE NEW RETAIL KING - CLICK HERE
U.S. STOCK FUTURES FIRM UP AFTER IN-LINE PCE PRICE DATA - CLICK HERE
MORTGAGE DATA LIFTS UK HOMEBUILDERS - CLICK HERE
EUROPE’S ‘SUPER 7’ HAVE CATCH-UP POTENTIAL - CITI - CLICK HERE
DOLLAR/YEN: “POLICY RESISTANCE” AT 152 - BOFA - CLICK HERE
STOXX GETS A LIFT FROM EARNINGS AS INVESTORS AWAIT INFLATION DATA - CLICK HERE
EUROPEAN FUTURES EDGE UP AHEAD OF KEY INFLATION DATA, EARNINGS - CLICK HERE
INFLATION IN FOCUS, BITCOIN BUOYANT - CLICK HERE
US closing snapshot
