Inflation Data Boosts Wall Street as October Rate Hike Odds Fall to 37%

Wall Street futures rose on Wednesday after U.S. inflation data came in softer than expected. The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, increased by 0.3% month-over-month and 3.4% year-over-year in August.

The data was lower than estimated figures of 0.4% and 3.7%. On a core basis, the PCE price index rose by 0.2% M/M and 3% Y/Y in August, compared to 0.1% and 3% in July.

This development has dented the odds of another interest rate hike in October. The probability of a quarter-point hike next month now stands at about 37%, down from around 49% a day ago, according to the CME FedWatch tool.