(Reuters) – Wall Street’s main indexes were set for a higher start on Friday after a key inflation report reiterated that price pressures were moderating, cementing bets for an interest-rate cut at the Federal Reserve’s upcoming meeting in September.
The Personal Consumption Expenditure index, the central bank’s preferred inflation measure, rose 2.5% in July on an annual basis compared to an estimate of 2.6%, according to economists polled by Reuters. On a monthly basis, it rose 0.2% as expected.
Among rate-sensitive megacaps, Alphabet (NASDAQ:GOOGL) and Meta (NASDAQ:META) gained 0.8% and 0.6%, respectively, while Tesla (NASDAQ:TSLA) added 1.2% in premarket trading.
Friday’s PCE report is the last before the Federal Reserve’s September meeting and follows Fed Chair Jerome Powell’s comments last week expressing support for an imminent policy adjustment.
“Powell’s speech at Jackson Hole reiterated several times that we’re approaching our desired target. Nothing here is going to cause me to change anything,” said Andre Bakhos, managing member at Ingenium Analytics.
“I would vote 25 bps because it’s been going in the direction the Fed has been targeting and the market has factored all of this in.”
Odds of a 25-basis-point reduction stood at 69.5%, according to the CME Group’s (NASDAQ:CME) FedWatch Tool, while those of a 50-bps reduction are at 30.5%.
Global markets are nearing the end of a tumultuous month for riskier assets, after signs of a sudden moderation in the labor market sparked fears of a quicker-than-expected slowdown in the world’s largest economy in early August. The influence of the Japanese yen carry trade worsened the rout.
Risk-taking has improved since then, with the Dow at a record high and on track for monthly gains as subsequent data, including Thursday’s upward revision to economic growth, soothed investor nerves.
At 08:43 a.m., Dow E-minis were up 79 points, or 0.19%, S&P 500 E-minis were up 25.25 points, or 0.45%, Nasdaq 100 E-minis were up 162.5 points, or 0.84%.
The tech-focused Nasdaq and the S&P 500 closed lower in the previous session after Nvidia (NASDAQ:NVDA) failed to match investors’ sky-high expectations despite upbeat results and a broadly in-line forecast. The AI-chip bellwether was up 0.9% after a 6.4% drop in the previous session.
The benchmark S&P 500 is close to an all-time high, poised for a monthly gain of 1.2%, while the Nasdaq is down 0.47% in August.
Marvell (NASDAQ:MRVL) Technology forecast third-quarter results above Street estimates, sending the chipmaker’s shares up 11.2%.
Dell Technologies (NYSE:DELL) advanced 4.87% after lifting its annual revenue and profit forecasts, buoyed by demand for its AI-optimized servers.
Lululemon Athletica (NASDAQ:LULU) gained 3.86% after posting a beat on second-quarter profit, while Ulta Beauty (NASDAQ:ULTA) slid 6.2% after it trimmed its annual results forecasts due to slowing demand.
Investors will also parse the University of Michigan’s final reading on consumer sentiment for August later in the day.
Trading volumes are expected to thin ahead of the extended weekend due to the Labor Day holiday.
Source: Economy - investing.com
