(Reuters) – The New York Stock Exchange opened higher on Friday after the Federal Reserve’s most-watched PCE inflation data showed price pressures were moderating, supporting bets for an interest rate cut in September.
In early trading, the Dow Jones index gained 83.13 points, or 0.20%, to 41,418.18 points, and the broader Standard & Poor’s 500 rose 0.47% to 5,618.39 points.
The Nasdaq Composite gained 0.78% or 136.87 points to 17,653.30
The personal consumption expenditures (PCE) index rose 2.5% in July from a year earlier, beating analysts’ expectations for a 2.6% increase and following a similar increase in June, data released Friday by the Commerce Department showed.
On a monthly basis, the index rose 0.2%, as expected.
The Commerce Department report follows comments from Fed Chairman Jerome Powell last week, who expressed support for an imminent adjustment in U.S. central bank policy.
“Powell’s speech at Jackson Hole reiterated several times that we are getting closer to our desired goal. Nothing here is going to cause me to change anything,” said Andre Bakhos, an analyst at Ingenium Analytics.
After the data release, traders are betting on a 69.5% chance of a 25 basis point rate cut in September, while the chance of a 50 basis point cut is 30.5%, according to CME Group’s FedWatch.
The health of the US economy also appears solid, with consumer spending increasing significantly in July (0.5%). Markets had to digest a 3% upward revision to US GDP growth on Thursday, which may suggest that the Fed will not have to cut rates sharply to support activity.
In stocks, chipmaker Marvell Technology, which beat quarterly revenue expectations on Thursday and said it expected third-quarter results to beat estimates, gained more than 7% at the open.
Intel is up more than 5% as Bloomberg news agency reports the chipmaker is exploring options that could include a merger or spinoff.
Dell, which raised its annual revenue and profit forecasts on Thursday evening, supported by demand for its servers optimized for artificial intelligence (AI) and equipped with Nvidia chips, is up 1.6%.
(Written by Diana Mandiá)
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