The U.S. personal consumption expenditure index for June shows that inflationary pressures have not increased, bringing positive impact to the market. Investors’ expectations for a rate cut by the Federal Reserve this year have further strengthened, prompting major U.S. stock indices to rise across the board on Friday.
The U.S. Department of Commerce released the June personal consumption expenditure index (PCE) on the evening of the 26th, showing a year-on-year increase of 2.5%, the lowest in 5 months, meeting market expectations and lower than the previous value of 2.6%; on a monthly basis, it grew by 0.1%, although slightly higher than the 0% in May, it still met expectations.
The core PCE price index, excluding energy and food, increased by 2.6% year-on-year in June, slightly higher than the market expectation of 2.5%, but the growth rate was the same as the previous value in May, still the lowest since March 2021.
This indicates that inflationary pressures have not increased, bringing positive impact to the market. Investors’ expectations for a rate cut by the Federal Reserve have further strengthened this year, leading to a broad rally in major U.S. stock indices on Friday, with the Dow Jones Industrial Average rising more than 650 points and TSMC ADR also rising by 1.04%.
Sam Stovall, an analyst at CFRA Research, pointed out that the market trend on Friday was driven by multiple factors, including oversold sentiment, a GDP report on Thursday that was stronger than expected, and expectations of the Federal Reserve starting to cut interest rates due to economic recovery.
David Russell, an analyst at TradeStation, stated that the personal consumption expenditure data provided more evidence that inflation is in a downward trend.
The four major U.S. indices rose in unison on the 26th:
– The Dow Jones Index rose by 654.27 points, or 1.64%, to close at 40589.34 points
– The Nasdaq Index rose by 176.16 points, or 1.03%, to close at 17357.88 points
– The S&P 500 Index rose by 59.88 points, or 1.11%, to close at 5459.1 points
– The Philadelphia Semiconductor Index rose by 97.77 points, or 1.95%, to close at 5103.13 points
In terms of the seven giants in the U.S. stock market, except for Tesla and Google’s parent company Alphabet, which have not completely emerged from the shadow of their financial reports and fell slightly, the other five companies saw gains, with Meta closing up by 2.71%.