NEW YORK— New York’s major indices snapped a four-day losing streak, posting a significant rebound today as key inflation data met market expectations, spurring a wave of bargain-hunting. Investor sentiment was boosted by the release of the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation, for August.
The Dow Jones Industrial Average finished up 299.97 points (0.65%) at 46,247.29. The S&P 500 climbed 38.98 points (0.59%) to 6,643.70, and the tech-heavy Nasdaq Composite advanced 99.37 points (0.44%) to 22,484.07.
Inflation and Consumption Steady
The Commerce Department reported that the Core PCE Price Index, which excludes volatile food and energy, increased by 0.2% month-over-month (MoM) and 2.9% year-over-year (YoY) in August—both figures aligning precisely with consensus forecasts and holding steady at July’s levels. The headline PCE Price Index saw a 0.3% MoM rise and a 2.7% YoY increase.
Market participants interpreted the results as "moderate" and non-alarming, quickly pivoting to a buying bias that powered the broad-based rally. David Russell, Global Market Strategy Head at TradeStation, commented, "After three days of losses, these figures were positive enough to bring buyers off the sidelines."
Adding to the optimism, reports showed U.S. consumer spending and income both exceeded forecasts. Personal Consumption Expenditures rose by a solid 0.6% MoM, while Personal Income increased by 0.4%. Although the final Consumer Sentiment Index for September eased slightly to 55.1 from the preliminary 55.4, the minor dip failed to deter market momentum.
Sector Leaders and Stock Movers
In sector performance, all categories advanced except for Consumer Staples. Cyclical sectors led the gains, with Real Estate, Utilities, Materials, and Consumer Discretionary all jumping over 1%.
Among individual stocks, electric vehicle giant Tesla was a standout, surging over 4% and distinguishing itself among the trillion-dollar mega-cap technology firms, which were largely flat.
Elsewhere, gaming company Electronic Arts (EA) rocketed 14% following news of a reported $50 billion-scale acquisition and delisting by a consortium including Saudi Arabia’s sovereign wealth fund and private equity firm Silver Lake. Chipmaker Intel also gained more than 4% amid rising anticipation of an investment from Apple.
Conversely, cloud infrastructure provider Oracle declined 2.7%. Despite its recent massive contract with OpenAI, the stock has been pressured by growing investor caution over funding concerns and its concentration of revenue with a small number of large clients.
The market's reduced anxiety was reflected in the CBOE Volatility Index (VIX), which tumbled 8.66% to 15.29. Meanwhile, Fed rate expectations shifted slightly, with the CME FedWatch Tool showing a 67.0% probability of a 50 basis point rate cut by December, a decrease from 73.3% the day before.
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