Stock market today: US indexes gain after soft inflation report supports more rate cuts

US stocks rose on Friday after cool inflation data suggested that the Federal Reserve has more room to cut interest rates.

The personal consumption expenditures price index, which is considered the Fed’s preferred inflation measure, increased 0.1% in August, in-line with economist estimates.

On a year-over-year basis, the PCE Index rose 2.2%, slightly below economist estimates of 2.3%.

According to Bellwether Wealth chief investment officer Clark Bellin, the data shows that the Fed was right in starting its interest rate cuts with a 50 basis point move last week.

“The Fed feels as though it has won the battle on inflation and its primary focus is making sure the job market stays steady,” Bellin said in an email to B-17.

According to Carson Group macro strategist Sonu Varghese, investors can thank productivity for the slowdown in inflation.

“An underrated story over the past year and half is that investment spending by firms has increased productivity, and that’s allowed for strong income gains and output even as inflation eases,” Varghese said via email.

Looking ahead to next week, investors will be laser-focused on the September jobs report, set to be released on Friday.

Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:

• S&P 500: 5,750.44, up 0.1%

• Dow Jones Industrial Average: 42,357.85, up 0.4% (183 points)

• Nasdaq composite: 18,192.78, up 0.1%

Here’s what else is going on:

• Russia’s economy is showing signs of stagflation as it reels from the impact of its war against Ukraine.

• Hedge fund billionaire David Tepper said he’s loading up on Chinese stocks amid stimulus measures.

• A majority of millionaires plan to vote for Harris over Trump, according to a new survey.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil was down slightly by 0.04% to $67.64 a barrel. Brent crude, the international benchmark, was lower by 0.18% to $71.47 a barrel.

• Gold was down 0.11% to $2,691.90 an ounce.

• The 10-year Treasury yield was lower by 3 basis points at 3.772%.

• Bitcoin was up 0.74% to $65,667.