Trump stock price today Inflation Data Cools Market Concerns, Boosting Wall Street and Easing Dollar Strength
A report from the U.S. Commerce Department revealed that the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure, came in lower than analysts had anticipated. This supported the narrative that price growth is on track to meet the Fed’s 2% inflation target, easing investor concerns.
The big headline today is the PCE report, which showed a lower inflation level than expected, and that’s good news, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.
Inflation Data and Market Reaction
Throughout the week, equity markets had faced pressure, particularly after central banks, including the U.S. Federal Reserve, signaled a slowdown in the pace of interest rate cuts for the upcoming year. Additionally, concerns over the potential U.S. government shutdown and debt ceiling negotiations in Washington had unsettled markets.
The focus of the market has been on the Fed’s announcement that while they lowered interest rates by 25 basis points, they plan to slow future rate cuts, which certainly shook the markets, Ghriskey added. The potential government shutdown is another big focus. Markets never like that.
For the week, the S&P 500 and Nasdaq were poised for their biggest weekly declines since September, while the Dow was on track for its largest weekly drop since March 2023.
Stock Market Movements
On Friday, Wall Street’s major indexes saw a significant rebound. The Dow Jones Industrial Average gained 510.48 points, or 1.22%, closing at 42,852.72. The S&P 500 rose by 68.42 points, or 1.17%, to reach 5,935.79, and the Nasdaq Composite increased by 223.90 points, or 1.16%, to 19,596.67.
In contrast, European stocks fell, setting the stage for their worst week in three months as President-elect Trump’s comments about possible tariffs on the European Union spooked investors. MSCI’s global stock gauge rose by 0.63%, but European indices like the STOXX 600 and the FTSEurofirst 300 saw declines of 0.81% and 0.90%, respectively.
Bond Yields and Dollar Trends
Treasury yields retreated after the inflation data fueled expectations that the Fed might reduce rates further in 2025. The yield on the benchmark U.S. 10-year note dropped 6 basis points to 4.51%, while the 2-year note yield fell 2.6 basis points to 4.293%.
Meanwhile, the dollar weakened against a basket of world currencies, although it was still on track to post its third consecutive weekly gain. The dollar index fell by 0.41% to 107.99, with the euro rising 0.4% to $1.0403 and the yen weakening by 0.55% against the greenback to 156.56.
Gold and Oil Markets
Gold prices surged following the inflation report, though the yellow metal appeared set for a weekly loss. Spot gold rose by 1.33% to $2,628.21 an ounce, while U.S. gold futures gained 1.01% to $2,618.50 an ounce.
In the oil market, prices dipped amid concerns about weakening demand, particularly in China, the world’s largest oil importer. U.S. crude fell by 0.17% to $69.27 per barrel, while Brent crude slipped 0.16% to $72.78 per barrel.
Cryptocurrency Update
Bitcoin, in response to the inflation data, pared its losses, gaining 0.08% to $97,370. Ethereum, on the other hand, declined by 0.75%, settling at $3,390.10.
In conclusion, despite market pressures earlier in the week, Friday’s positive inflation data brought a breath of relief to investors, buoying stock prices and softening the dollar. While uncertainties remain with political risks and global trade tensions, the cooling inflation figures provided a much-needed boost to market sentiment heading into the weekend.
