U.S. stocks moved higher Wednesday as a softer-than-expected inflation report eased concerns about another Federal Reserve interest-rate increase and put Wall Street on track to finish September with gains.
The S&P 500 and Nasdaq Composite both advanced during the session, while the Dow Jones Industrial Average was relatively weaker. The S&P 500 was up about 0.6% and the Nasdaq gained roughly 1% as investors responded to the latest inflation data.
The U.S. Commerce Department reported that the Personal Consumption Expenditures (PCE) Price Index increased 3.4% in August from a year earlier. That was below economists’ 3.7% expectation and remained above the Federal Reserve’s 2% inflation target.
The data helped reduce expectations that the Federal Reserve would raise interest rates again at its October meeting. Market pricing showed the probability of another rate increase falling significantly following the inflation report.
Lower short-term Treasury yields provided additional support for stocks because falling yields can reduce borrowing costs and make equities more attractive compared with bonds.
However, longer-term Treasury yields remained elevated. The 10-year Treasury yield climbed above 5.2%, while the 30-year yield remained around 5.6%, reflecting continuing concerns about inflation, government borrowing and economic growth.
Investors also received an encouraging update on the broader U.S. economy, with second-quarter GDP growth revised upward to an annualized rate of 2.2%. Consumer spending and investment in artificial-intelligence infrastructure contributed to the stronger reading.
Technology stocks helped lift the market, with major companies including Nvidia, Apple, Amazon and Alphabet among the notable gainers. Hewlett Packard Enterprise also rose after improving its long-term outlook for its networking business.
Despite continued uncertainty surrounding oil prices, inflation and monetary policy, the latest session left the S&P 500 and Nasdaq positioned for monthly and quarterly gains.
The market’s performance shows that investors remain focused on the balance between economic growth, inflation and Federal Reserve policy as September comes to an end.
Swifteradio.com
