The Dow Jones continues to rise. Recently, it soared more than 200 points in response to the lower-than-expected Personal Consumption Expenditure (PCE) price index. This indicates that inflation has peaked. And will be a factor to slow down the rate hike of the Federal Reserve (Fed).
As of 10:18 p.m. Thai time, the Dow Jones Industrial Average was 33,063.02 points, plus 203.99 points or 0.62%.
Today marks the last trading day of March. The Dow is up 0.6% for the month, while the S&P 500 and Nasdaq are up 2% and 4.9% respectively.
Today was also the last trading day of Q1 2023, with the Dow down nearly 1%, while the S&P 500 and Nasdaq rose 5.5% and 14.8% respectively.
Investors predict that The Fed will hold interest rates steady at its next meeting in May. And there will be no interest rate hike this year. after the release of the PCE index today
The CME Group’s FedWatch Tool indicates investors are 53.5% weighing the Fed to hold interest rates between 4.75-5.00% at its May 2-3 meeting and 46.5% weighting it to raise interest rates. 0.25%
In addition, investors expect the Fed to hold interest rates at 4.75-5.00% at its June and July meetings. Before cutting interest rates by 0.25% in September, faster than the Fed expects to start cutting rates in 2024.
The US Commerce Department said its headline PCE index, which includes food and energy, rose 5.0% in February from a year ago. That was below analysts’ expectations of 5.1% and slowing from 5.3% in January.
On a month-on-month basis, the PCE index rose 0.3% in February, below analysts’ expectations of 0.5% and slowing from January’s 0.6% gain.
As for the core PCE index, which excludes the food and energy sectors. It was the Fed’s primary focus on inflation, rising 4.6% in February year-on-year. This was below analysts’ expectations of 4.7% and slowed from 4.7% in January.
On a month-on-month basis, the core PCE index rose 0.3%, below analysts’ expectations of 0.4% and slowing from January’s 0.5% gain.
The PCE index is a gauge of inflation that can detect changes in consumer behavior. and covers a broader range of prices for goods and services than the Consumer Price Index (CPI) data.