The Federal Reserve's primary inflation rate, the core PCE price index, came in right in line with modest expectations, helping to cement expectations for an Oct. 30 rate cut. S&P 500 futures climbed modestly after three straight down days, with Intel among the top early performers amid news that President Trump is threatening tariffs on chip imports for companies that don't meet demands for domestic production.
Boeing rallied amid reports that the Trump administration will ease 737 jet delivery restrictions. Tesla climbed after a new street-high price target from Wedbush.
9:01 a.m. ET
Inflation Data, Unrounded
The core PCE price index rose 0.23% in August. On a 12-month basis, the Fed's key core inflation rate ticked up to 2.91% from 2.85%. That's the highest since February, but not an overshoot.
8:46 a.m. ET
Fed Rate-Cut Odds Unmoved
Markets still see 88% odds of an Oct. 29 rate cut, according to CME Group's FedWatch tool. Odds of a third-straight cut in December held around 64%.
8:44 a.m. ET
Personal Consumption Is Strong
Personal consumption expenditures rose a strong 0.6%, providing more evidence of a resilient consumer. That follows an upward revision to consumer spending for Q2.
8:43 a.m. ET
S&P 500 Futures Rise
S&P 500 futures are up 0.4% following the in-line inflation data. Futures had been up 0.1%.
8:31 a.m. ET
PCE Inflation Data
The Fed's key core inflation gauge rose 0.2% in August, as expected. The 12-month core inflation rate held at 2.9%.
PCE Inflation Forecasts
Wall Street expects the core PCE price index for August to rise 0.2% from July, keeping the Fed's key 12-month core inflation rate at 2.9%.
In addition, personal income is expected to rise a moderate 0.3%, while personal consumption expenditures grow 0.4%.
Fed Rate-Cut Outlook
Ahead of today's key inflation report, markets see 88% odds that the Fed will cut its key rate a quarter-point at the Oct. 29 policy meeting. Those odds fell a bit on Thursday on some fairly solid economic reports.
While further Fed rate cuts are expected to support a weak job market, initial claims for jobless benefits slid 14,000 to just 218,000 in the week of Sept. 20, while ongoing claims for unemployment benefits continued to ease after touching nearly four-year highs in June.
S&P 500
S&P 500 futures edged up 0.1% in early Friday stock market action. That follows Thursday's 0.5% loss, which was a third straight decline.
Still, the S&P 500 is off just 1.3% from Monday's record closing high and up more than 12% year to date.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
