Softer PCE helps lift US stocks, but sector leadership remains mixed
SPY•US stocks rose after August PCE inflation came in below expectations: headline PCE increased 0.3% monthly and 3.4% annually, while core PCE rose 0.2% monthly and 3.0% annually. The Nasdaq gained about 1%, the S&P 500 about 0.5%, and the Dow edged higher.
1. Inflation and stocks
Wall Street's major indexes traded higher after August PCE, the Federal Reserve's preferred inflation measure, came in softer than economists expected. Headline PCE rose 0.3% from July, versus a 0.4% forecast, and 3.4% year over year, below the 3.7% consensus estimate. Core PCE rose 0.2% monthly and 3.0% annually, below forecasts of 0.3% and 3.3%.
2. Sector and monthly trends
Technology and communication services each gained more than 1%, while most S&P 500 sectors fell; real estate was down about 0.9%. For September, the S&P 500 was up about 0.4% and the Nasdaq more than 2.5%, while the Dow was down more than 3% and on pace to end a five-month winning streak.
