Dow, S&P 500, Nasdaq Rise After PCE Inflation Data; SoFi Stock, Ulta, Meta, Netflix, Coinbase, HPE and More Movers
After all that, the stock market is pretty much back where it started Friday’s session.
The S&P 500 was up 0.1%. The Nasdaq Composite was up nearly 0.2%. The Dow was up 68 points, or 0.1%.
That’s about where the major indexes were trading prior to the September personal consumption expenditures price index and the University of Michigan’s December update on consumer sentiment and year-ahead inflation expectations.
Stocks popped after the inflation report mostly matched expectations, and the consumer sentiment reading came in a touch above expectations. But neither report actually changed things for Wall Street.
“With the FOMC meeting next week, there’s a reasonable case that traders—who have been notably aggressive over the last two weeks—may be taking a short-term pause,” Frank Cappelleri, founder of technical analysis firm CappThesis, tells Barron’s. “From a seasonality perspective, it’s also common to see mid-month softness, so a brief consolidation here would not be surprising.”
Traders still anticipate a quarter-point rate cut when the Federal Open Market Committee meets next week. Those odds were exactly where they were prior to the PCE report at 87.2%, according to the CME FedWatch Tool.
The PCE numbers were stale, offering a look at September price growth that was delayed due to the government shutdown. Though the University of Michigan’s numbers were encouraging, the survey’s director Joanne Hsu noted the month’s increase was “concentrated primarily among younger consumers.”
“Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices,” she said.
Taken together, it makes sense for the S&P 500 to trade sideways—especially given the index crossed its Oct. 28 closing high just before it lost steam.
“The good news is that the index has now built a healthy cushion, rallying more than 5% off the recent lows,” Cappelleri says. “In a best-case scenario, any near-term weakness evolves into another higher low, ideally forming above the 50-day moving average. That would be particularly constructive given that the S&P reclaimed the 50-day before Thanksgiving, turning it back into support. There’s nothing alarming in the current price action. In fact, the market has responded remarkably well after the nearly 6% pullback, which was the deepest drawdown of the year to that point.”
