US Stocks Rally on Softer Inflation Data, Rate-Hike Fears Ease
US stocks opened higher on Wednesday after softer-than-expected inflation data eased rate-hike fears. The Personal Consumption Expenditures price index rose 3.4% year over year in August, below the 3.7% increase forecast by economists polled by Reuters.
The lower than expected inflation reading led to a decrease in the chances of an October rate hike from about 45% before the data was released to roughly 35%, according to figures compiled by LSEG.
Megacap and growth stocks moved higher in early trading, with Amazon.com and Apple edging up, while Alphabet gained 2.1%. The Dow Jones Industrial Average rose 50.58 points or 0.10% to 51,400.50, the S&P 500 gained 33.17 points or 0.43% to 7,704.01, and the Nasdaq Composite rose 193.57 points or 0.72% to 26,991.11.
Despite September's weakness driven by bond-market volatility and elevated oil prices amid the US-Iran conflict, the S&P 500 and Nasdaq remained on track for a second consecutive quarterly gain if the advances held. The benchmark 10-year Treasury yield held steady at 5.246% on Wednesday.