US stocks climb as the Fed’s preferred inflation gauge rises in-line with estimates

• Stocks climbed and the Fed’s preferred inflation gauge was in line with expectations
• Excluding food and energy, the PCE price index increased 0.4% month-over-month in January. 
• The reading should boost the outlook for Fed rate cuts, as inflation doesn’t look to be reaccelerating. 

US stocks climbed Thursday as investors took in fresh inflation data for January. 

The US Department of Commerce reported that the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, climbed 0.3% month-over-month and 2.4% compared to the same time last year. Both figures matched consensus estimates. 

Core PCE, which excludes the more volatile food and energy costs, climbed 0.4% from December to January, and 2.8% compared to a year ago.

The fact that inflation doesn’t appear to be reaccelerating should boost the outlook for looser monetary policy. 

In a note after the data release, Capital Economics’s chief North America economist Paul Ashworth said the figures were no surprise following the hot CPI and PPI reports, and it contributes to the case for pushing interest rate cuts back.

And given that first-quarter GDP growth is on track to hit between 2.5% and 3.0%, he said the Fed’s preferred inflation gauge doesn’t change the broader narrative.

“Adverse weather in January has been creating a lot of noise in the economic data for the month we have seen so far, whether it’s the retail sales figures or the industrial production numbers; it is also likely today’s personal income and spending data was similarly impacted,” said Richard de Chaza of William Blair. “Nevertheless, it continues to look as though both consumer spending and income growth are decelerating, even outside this noise”

Here’s where US indexes stood as the market opened at 9:30 a.m. on Thursday: 

• S&P 500: 5,092.14, up 0.44% 

• Dow Jones Industrial Average: 39,038.09, up 0.23% (+ 89.07 points)

• Nasdaq Composite: 16,075.07, up 0.78%

Here’s what else is going on: 

• “Boomer nation” runs the US, and investors should focus on three sectors to capitalize, according to a money manager.
• El Salvador’s President Nayib Bukele said the country’s bitcoin holdings are up more than 40%.
• New home listings see the biggest jump in almost three years.
• The stock market is only 50% through its current bull rally based on historical data, NDR said.
• Russia’s energy trade with India could be strained amid fresh sanctions, a report said.

In commodities, bonds, and crypto: 

• Oil prices moved mixed, with West Texas Intermediate up 0.09% to $78.59 a barrel and Brent crude, the international benchmark, down 0.14% to $83.56 a barrel.
• Gold edged higher 0.7% to $2,057.30 per ounce.
• The 10-year Treasury yield moved lower one basis point to 4.256%.
• Bitcoin climbed 4.62% to $63,077.