| The S&P 500 and Nasdaq snapped a three-day win streak on Thursday after taking fractional losses for the trading session.
Dow [-0.9%]
S&P 500 [-0.4%]
Nasdaq [-0.6%]
Russell 2K [-0.7%]
Futures are ticking higher in early trading. S&P 500 contracts are on course for a higher open with a 0.7% gain.
The latest update on the Fedās preferred inflation gauge, the Personal Consumption Expenditures index, will drop at 8:30 am, and itās likely to significantly influence todayās trading session. ONE tradeā¦. ONE ticker symbolā¦ HUGE Results
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š° March PCE Inflation Report: Critical for Interest Rates
The Federal Reserveās preferred inflation measure, the personal-consumption expenditures (PCE) price index, is set to release at 8:30 a.m. ET today. This release is keenly awaited by investors, given the recent sequence of unexpectedly high inflation figures that have stirred doubts about the Fed's ability to lower interest rates within the year.
Trends & Expectations š
Thursdayās preliminary data already hinted at stronger inflation pressures, with core PCEāwhich excludes the often volatile food and energy pricesārising at an annualized rate of 3.7% in the last quarter, well above expectations. Year-over-year, core PCE increased by 2.9%, suggesting that the upcoming March data might exceed prior forecasts or that earlier months' figures could be revised upwards.
Forecasts & Adjustments š
Before Thursday's reveal, the consensus among economists was a 2.6% year-over-year increase in the overall PCE index for March, with core PCE expected to rise by 2.7%. Monthly expectations were set at a 0.3% increase for both overall and core measures. However, the actual figures may need substantial revisions in light of recent developments.
Inflation & Rates šÆ
The Fed's ongoing challenge is managing inflation to meet its 2% target. Persistent inflation above this benchmark complicates the path for potential rate cuts, a key tool for stimulating economic growth. The outcome of today's PCE report will be pivotal in shaping market expectations and the Fed's monetary policy moves going forward.
Market Impact š
Given the high stakes associated with these inflation readings, todayās PCE report is expected to be a significant market mover. Investors will be scrutinizing the data for insights into inflation trends and potential adjustments in the Fed's rate strategy, with implications for investment portfolios and broader economic forecasts.
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