The U.S. stock market traded higher on Friday after inflation data in line with expectations boosted expectations for interest rate cuts in September, although Nike shares fell after a forecast of disappointing annual sales.
Commerce Department data showed that the PCE price index – the Fed’s preferred gauge of inflation – remained unchanged in May from the previous month and rose 2.6% over 12 months, in line with expectations.
Excluding volatile food and energy components, the core index grew by 0.1% month-on-month and 2.6% year-on-year.
According to FedWatch data, the odds of a rate cut in September increased to 68% from 61% pre-data.
“This is a perfect report: It gives the Fed the green light to cut rates in September and sets the stage for the continuation of the ‘columbian’ rhetoric,” said Jay Woods, chief global strategist at Freedom Capital Markets.
Large-cap stocks including Apple, Nvidia and Amazon.com rose between 0.2% and 1.2%.
Most subsectors of the S&P 500 are up, led by technology stocks.
However, Nike fell 17.1% after forecasting a decline in fiscal 2025 revenue, weighing on the consumer discretionary sector.
The Dow Jones rose 0.49% to 39,357.76 points. The S&P 500 rose 0.68% to 5,520.09 points, while the Nasdaq Composite rose 0.85% to 18,010.03 points.
Source: Terra
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