- US stocks edged higher on Monday as investors digested Friday’s PCE inflation data.
- The PCE price index rose 2.5% year-on-year in February, in line with expectations.
- Inflation data bodes well for the possibility that the Federal Reserve will cut interest rates in June.
U.S. stocks edged higher on Monday as investors digested new inflation data and prepared for the start of the second quarter.
The PCE inflation data was released on Friday, when the stock market was closed for Good Friday, so investors are now reacting to the data.
The PCE price index (year-on-year) rose 2.5% in February, in line with economists’ expectations, and core PCE, which excludes food and energy prices, also rose 2.8% in February, also in line with expectations.
Based on CME futures data, this data bodes well for the Fed to start cutting rates in June. The probability that the Fed will cut interest rates by 25 basis points at its June FOMC meeting has increased from about 55% before the data was released to 60% now.
Fundstrat’s Tom Lee said in a note to clients over the weekend that the PCE data “reinforces Mr. Powell and the Fed’s belief that inflation is coming down” faster than consensus, “which is good for stocks.” he added.
Here are the U.S. indexes immediately after the 9:30 a.m. opening bell on Monday:
Here’s what else is happening today:
In Commodities, Fixed Income and Cryptocurrencies:
- West Texas Intermediate crude oil rose 0.08% to $83.24 a barrel. Brent crude oil, the international benchmark, fell 0.07% to $86.94 per barrel.
- Gold rose 1.72% to $2,277.00 per ounce.
- The 10-year Treasury yield rose 5 basis points to 4.26%.
- Bitcoin fell 2.20% to $69,745.
