(Reuters) – The New York Stock Exchange opened higher on Friday as data indicating a slowdown in inflation in September reassured investors about the trajectory of interest rates in the United States.
In early trading, the Dow Jones index gained 228.78 points, or 0.49%, to 46,963.39 points and the broader Standard & Poor’s 500 rose 0.66% to 6,783.21 points.
The Nasdaq Composite takes 0.88%, or 202.47 points, to 23,144.27 points.
Consumer prices increased slightly less than expected in September in the United States, which should allow the Federal Reserve (Fed) to maintain the course towards a further reduction in interest rates next week and to decide others in the future.
The consumer price index (CPI) increased by 0.3% in September compared to the previous month, compared to 0.4% in August, while analysts expected an increase identical to that of the previous month.
A more restrictive and closely watched measure, which excludes volatile items such as food and energy, also fell short of expectations.
If this report is not the one favored by the Fed to define its monetary policy, it was eagerly awaited, because the closure of the American federal administration has deprived the markets of official data over the last three weeks.
“It now looks about 88% likely that two more declines will happen this year. So that’s going to happen. Well, the market likes that,” said Joe Saluzzi, an analyst at Themis Trading.
Operators are widely betting on a further rate cut of 25 basis points at next week’s Fed meeting, and are now forecasting three quarter-point cuts by March, compared to April previously.
In addition to monetary policy, investors remain attentive to signs on the trade front, as President Donald Trump is scheduled to meet his Chinese counterpart next week, while toughening the tone with Canada.
The results are also on the agenda before the ramp-up of publications from several of the “Magnificent Seven” next week.
Intel stock jumped 5.3% as the chip giant beat third-quarter profit estimates. Its competitors are progressing in its wake, with AMD and Micron Technology gaining 6.10% and 3% respectively.
Procter&Gamble, which published a better-than-expected profit for its first quarter on Friday, showing that consumer appetite remains solid, rose 2.45%.
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(Writing by Diana Mandiá, editing by Kate Entringer)
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