Dow gains 50.06 points after PCE comes in below expectations, supporting Fed rate hold in October

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Summary · why it matters

The Dow Jones Industrial Average rose 50.06 points, or 0.10%, to 51,399.98, supported by a decline in U.S. Treasury yields after the release of the Personal Consumption Expenditures price index came in below expectations, easing investors' concerns about inflation and interest rate hikes by the Federal Reserve. The latest CME Group FedWatch Tool indicates that investors now assign a 62.9% probability to the Fed holding rates at 3.75-4.00% at its October meeting, up from 49.1% yesterday, while the probability of a 0.25% hike to 4.00-4.25% fell to 37.1% from 50.9% yesterday. The U.S. Commerce Department reported that the headline PCE index rose 3.4% year-on-year in August, below the expected 3.7%, and rose 0.3% month-on-month, below the expected 0.4%. The core PCE index rose 3.0% year-on-year, below the expected 3.3%, and rose 0.2% month-on-month, below the expected 0.3%. Meanwhile, the yield on 30-year U.S. Treasury bonds fell to 5.578% after surging yesterday to its highest level since 2002, while the 10-year yield fell to 5.217% after hitting its highest since 2007 yesterday, and the 2-year yield fell to 4.827%.

Impact on assets 4

Carbon Removal (DAC)▲ · 1 stocks
CME Group Inc
CME
▲ PositiveMonetaryrelevance

CME Group's FedWatch Tool is cited showing rate-hold odds rising to 62.9% after the soft PCE print, boosting expected trading/derivatives activity.

Others▼ · 3 stocks
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