(CercleFinance.com) – Wall Street set new records on Friday following inflation figures that were in line with expectations, with the market wanting to believe that this will prompt the Federal Reserve to lower its rates soon.
At the end of the morning, the Dow Jones index gained 0.7% to 39,429.1 points, while the broader S&P 500 gained 0.6% to 5515.9 points, after having established a new historic high at 5523.6 points.
The Nasdaq Composite advanced 0.6% to 17,960.8 points after briefly exceeding the 18,000 point mark and reaching a new absolute record at 18,035 points.
Over the entire first half, which will close this evening, the Dow is up 4.2%, the S&P not far from 15% and the Nasdaq around 19%.
The American stock markets benefit at the best time – that is to say during the last session of the week, of June and of the half-year – from a boost from the economy thanks to a good ‘PCE’ index.
The Commerce Department reported earlier in the morning that the consumer price index, the Federal Reserve’s preferred measure of inflation, rose just 0.1% in May.
Core PCE inflation, which excludes volatile items such as energy and food, also showed a very limited increase of 0.1%.
This is its lowest monthly variation in three and a half years.
‘This will allow the Fed to focus more on the labor market, and a little less on inflation,’ comments Bastien Drut, head of strategy and economic studies at CPR AM.
These figures reinforced the prospect of a first rate cut by the Fed in September, the probability of which is now assessed at 61% by investors, compared to more than 59% the day before.
On the bond market, the yield on ten-year Treasuries – which has been on a downward slope for two weeks – nevertheless continues its upward movement to return above 4.30%.
The only disappointment of the day, Nike plunged 19% while the world’s leading manufacturer of sporting goods reported disappointing sales over the past quarter and revised its targets upwards.
On the oil front, oil prices are consolidating a little but are nevertheless heading towards a third consecutive week of progression, with a barrel of light Texas crude (WTI) falling less than 0.5% to 81.4 dollars.
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