Inflation Insight Sparks Wall Street Rally
Wall Street indices rose on Friday as inflation data met expectations, easing fears of Federal Reserve rate cut delays. August's PCE index rose by 2.7%, aligning with forecasts. Despite mixed central bank signals, concerns over newly announced tariffs remain as analysts note potential inflationary effects still unfolding.
Wall Street's main indices saw an uplift on Friday morning following inflation data that matched expectations, somewhat soothing concerns about delayed interest rate cuts by the Federal Reserve. The Commerce Department reported a 2.7% annual rise in the Personal Consumption Expenditures index for August, closely matching economist predictions.
While core PCE, excluding food and energy, increased by 2.9% as anticipated, the data arrives amidst investor uncertainty due to conflicting signals from the Fed's policymakers. Despite this, analysts like Citigroup's Nathan Sheets caution that the full inflation impact, especially from new tariffs, has yet to manifest in pricing.
New tariffs introduced by President Trump on Thursday, targeting various imports with high duties, threaten to renew trade wars and complicate inflation forecasts further. Market activity before the opening indicated upward trends, with significant movements in shares like Eli Lilly and Intel, amid broader market apprehensions regarding macroeconomic fundamentals.
(With inputs from agencies.)
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