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U.S. stocks are rising after inflation data boosts hopes for Fed pause

U.S. stocks are rising after inflation data boosts hopes for Fed pause
© Reuters.

 

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By Liz Moyer

Investing.com — U.S. stocks were rising after a key inflation reading came in softer than expected.

At 10:40 ET (14:40 GMT), the Dow Jones Industrial Average was up 160 points or 0.5%, while the S&P 500 was up 0.6% and the NASDAQ Composite was up 0.8%.

The Commerce Department’s inflation report showed the personal consumption expenditure index, which is closely watched by the Federal Reserve, rose 0.3% in February from the prior month versus a 0.6% rise in January. That was below expectations. 

For the year through February, core PCE prices rose 4.6%, matching the lowest it has been since the end of 2021.

The University of Michigan’s consumer sentiment reading came in below expectations at 62, down from the previous reading.

The Fed has said it is watching the data as it makes its decisions about the next step for interest rates as it continues its quest to tame inflation. Softer inflation numbers and a still-tight labor market will be factors when it next meets in May. Futures traders are evenly split on betting for a quarter of a percentage point rate or a pause. 

It’s the last day of the first quarter, ending a volatile three months for stocks. The Nasdaq is on track for its biggest quarterly percentage gain since the end of 2020, while the S&P 500 is up nearly 6% despite a battered banking sector. 

The KBW Regional Banking Index (NASDAQ:KBWR) is down 19.9% in the first quarter.

Shares of Virgin Orbit Holdings Inc (NASDAQ:VORB), which is billionaire Richard Branson’s commercial satellite launch company, fell 42% after it said it would lay off most of its staff after it failed to secure funding. 

Nikola Corp (NASDAQ:NKLA) stock was down 12% after it priced a sale of $100 million in stock 20% below Thursday’s closing price.

Oil was rising. Crude Oil WTI Futures were up 0.9% to $75.06 a barrel, while Brent Oil Futures were up 0.7% to $79.13 a barrel. Gold Futures were flat at $1,996.

Source: Investing.com

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