A softer-than-anticipated inflation reading in the US has buoyed hopes that the Federal Reserve might not hike interest rates as soon as next month. A commerce department report indicated that the personal consumption expenditures (PCE) price index was 3.4% on an annual basis in August, compared to economists' estimates of 3.7%.
Following this data, traders now perceive a roughly 35% chance of an October rate hike, a decrease from approximately 45% previously, according to LSEG data. The Federal Reserve has faced pressure from the White House to cut rates, after raising them earlier this month for the first time since 2023.
Separately, second-quarter GDP data showed that the US economy grew at a solid pace, supported by robust consumer spending and business investment related to AI infrastructure buildout. Additionally, private employers added 90,000 jobs in September, according to ADP, exceeding expectations and up from 36,000 in August.
At 09:55 am ET, Wall Street's main indexes saw gains. The Dow Jones industrial average rose 50.58 points, or 0.10%, to 51,400.50. The S&P 500 gained 33.17 points, or 0.43%, to 7,704.01, and the Nasdaq Composite increased by 193.57 points, or 0.72%, to 26,991.11.