US Stocks Rise as Cooler Inflation Data Reduces Rate Hike Expectations

US stocks rose on Thursday after data showed that inflation increased at a cooler pace than expected. The core PCE, the Fed's preferred gauge of inflation, remained unchanged at 3% annually, below the 3.3% increase that was forecast.

The data suggests that the US economy remains resilient despite elevated inflation. With a stable jobs market and consumers comfortable spending even as prices rise, markets reined in Fed rate hike expectations to 37% for an October hike.

However, the key question now is whether cooler inflation can outweigh resilient consumer demand and stronger growth, limiting how quickly the Fed can ease policy.