The major U.S. index futures indicate a marginally higher opening on Monday, suggesting that stocks are set to build on the modest gains recorded last Friday. Expectations regarding the trajectory of interest rates could bolster initial gains in anticipation of the Federal Reserve’s Equities meeting this week. With the Federal Reserve anticipated to reduce interest rates by an additional quarter point, market participants are expected to scrutinize the accompanying statement for insights regarding the probability of additional rate reductions in the upcoming year. A report presently suggests an 89.2 percent probability that the Federal Reserve will reduce rates by a quarter point on Wednesday, while indicating a 70.3 percent likelihood that the central bank will maintain rates at their current level in January.
Following a volatile trading session on Thursday that concluded with minimal changes, equities exhibited slight gains during Friday’s trading activities. The recent upward movement has led the Nasdaq and the S&P 500 to achieve their highest closing levels in a month. The major averages retraced some of their earlier gains but continued to operate within positive territory. The Dow increased by 104.05 points, representing a rise of 0.2 percent, reaching a level of 47,954.99. The Nasdaq experienced a gain of 72.99 points, equivalent to 0.3 percent, closing at 23,578.13. Meanwhile, the S&P 500 saw an uptick of 13.28 points, also a 0.2 percent increase, finishing at 6,870.40. During the week, the Nasdaq, characterized by its concentration in technology stocks, experienced an increase of 0.9 percent, while the Dow Jones Industrial Average saw a rise of 0.5 percent. The S&P 500, a broader representation of the market, recorded a gain of 0.3 percent.
The modest strength observed on Wall Street followed the release of consumer price inflation data, which largely aligned with economist estimates. The Commerce Department reported that the personal consumption expenditures price index increased by 0.3 percent in September, consistent with the growth observed in August and aligning with economist projections. The annual growth rate of the PCE price index increased to 2.8 percent in September, up from 2.7 percent in August, aligning with anticipated outcomes. In September, the core PCE price index, which excludes food and energy prices, experienced a 0.2 percent increase, consistent with the rises observed in the preceding two months and aligning with economist forecasts. The core PCE price index’s annual growth rate decreased to 2.8 percent in September, down from 2.9 percent in August. Analysts had anticipated that the annual growth rate would stay constant. The unforeseen deceleration in the yearly rate of core price growth bolstered recent optimism regarding the trajectory of interest rates in anticipation of next week’s Federal Reserve meeting.
Buying interest remained relatively muted, as the Federal Reserve was largely anticipated to implement a quarter-point rate cut. Computer hardware stocks continued their robust upward trajectory observed during Thursday’s trading session, as evidenced by the NYSE Arca Computer Hardware Index’s increase of 1.7 percent. Significant strength was also visible among airline stocks, as reflected by the 1.5 percent gain posted by the airline index. Networking, semiconductor, and software stocks exhibited considerable strength, whereas steel stocks experienced a marked decline.