S&P 500 Jumps on Softer Inflation Data

The S&P 500 rose on softer U.S. inflation data, easing concerns about another rapid interest-rate hike by the Federal Reserve.

The PCE price index rose 0.3% month over month, while the market had expected a 0.4% increase.

This led to a fall in the yield on two-year Treasury notes and a weakening of the dollar against some major currencies.

While a lower expected path for interest rates reduces the discount rate applied to future earnings and slightly eases competition from risk-free government bonds, the market remains cautious due to high long-term Treasury yields, expensive energy, and lofty earnings expectations for AI companies.