Cooler than expected PCE adds some steam to US stock futures
SPY•US stock futures rose about 0.4% after August headline PCE inflation came in at 0.3% monthly and 2.6% annually, below estimates. Core PCE was also below expectations, while Treasury yields dipped.
1. Inflation data lifts futures
US stock futures moved higher after August inflation data came in below expectations. S&P 500 E-mini futures rose about 0.4%, accelerating from gains of roughly 0.1% before the data. Headline PCE rose 0.3% month over month and 2.6% year over year, versus estimates of 0.4% and 3.7%; core PCE rose 0.2% monthly and 3.0% annually, below estimates of 0.3% and 3.3%.
2. Other data and rate bets
Final second-quarter GDP growth was revised to 2.2%, above the 1.5% estimate, and September private payrolls rose 90,000, topping forecasts for 70,000. Traders put the chance of the Fed leaving rates unchanged at its October 27-28 meeting at 63%, up from 55% before the reports, while the odds of a quarter-point hike fell to 37% from 45%. The 10-year Treasury yield dipped to about 5.22%.
