S&P 500 dips, Nasdaq higher on modest rise in inflation
SPY•The S&P 500 fell 0.23% and the Nasdaq rose 0.25% as August PCE inflation came in at 3.4% year over year, below the 3.7% estimate. Market expectations for a Federal Reserve rate hike in October dropped to about 39%.
1. Inflation and rate expectations
The August Personal Consumption Expenditures Price Index rose 3.4% from a year earlier, below economists’ 3.7% estimate. Expectations for an October rate hike of at least 25 basis points fell to about 39%, from roughly 51% in the prior session and nearly 71% a week earlier. Analysts noted that changes to the PCE calculation methodology contributed to the lower reading.
2. Indexes and economic data
The S&P 500 fell 18.13 points, or 0.23%, to 7,652.71, while the Nasdaq Composite gained 66.46 points, or 0.25%, to 26,864. The Dow declined 431.84 points, or 0.84%, to 50,918.08. The S&P 500 and Nasdaq recorded their second straight quarterly gains. Separately, second-quarter GDP was revised to a 2.2% annualized rate, and private employment rose by 90,000 jobs in September after a revised 36,000 increase in August.
