US inflation data lifts global stocks, lowers Treasury yields
global stocks climbed for the first time in four sessions on Friday as equities steadied after a sharp selloff and U.S. economic data showed an improving inflation landscape, sending Treasury yields lower.
The Commerce Department said the personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, edged 0.1% higher last month after being unchanged in May, matching estimates of economists polled by Reuters.
In the 12 months through June, the PCE price index climbed 2.5%, also in line with expectations, after rising 2.6% in May.
The data likely sets the stage for the Fed to begin cutting rates in September, as the market widely expects.
«The more recent trend is building upon the market's confidence that we are on a trajectory that would get us to 2% over the long run,» said Vail Hartman, interest rate strategist at BMO Capital Markets in New York.
«This is just another month of good inflation data from the Fed's preferred measure of inflation.»
The Fed is scheduled to hold its next policy meeting at the end of July. Markets see a less than 5% chance for a rate cut of at least 25 basis points (bps) at that meeting, but are fully pricing in a September cut, according to CME's FedWatch Tool.
On Wall Street, U.S. stocks closed with strong gains, as small cap stocks were once again among the best performers in a market that continued its recent rotation into undervalued names.
However, megacap names also showed signs of stabilizing and the Nasdaq gained about 1% after
