Stocks rise, 2-year US bond yield eases after soft US inflation data
SPY•Wall Street stocks rose and the 2-year Treasury yield fell after August US inflation came in below expectations, reducing market expectations of a Federal Reserve rate hike next month. The PCE price index rose 0.3% monthly and 3.4% year over year.
1. Inflation eases rate expectations
US stocks and two-year Treasury prices rose Wednesday after August inflation was softer than expected. The PCE price index increased 0.3% month over month, below economists’ 0.4% estimate, and 3.4% year over year. Markets priced in about a 65% chance the Fed will keep rates steady next month, up from 55% before the data.
2. Yields diverge
The two-year Treasury yield fell 2.07 basis points to 4.868%. The 10-year yield rose 1.7 basis points to 5.272%, and the 30-year yield climbed to 5.6298%; the 10-year yield was on track for its largest monthly increase since 2022.
3. Stocks and oil advance
The S&P 500 rose 0.6% and the Nasdaq Composite gained 1%, while the Dow added 30.02 points. Oil prices rose, with US crude up 2.2% to $91.33 a barrel and Brent up 1% to $103.71.
