Amid uncertain trading, the S&P 500 and Nasdaq posted modest gains in Friday’s mid-morning trading. Meanwhile, the Dow sat close to the unchanged mark, as Wall Street looked to stabilize after its recent slide.
Trading took place amid PCE price data that rose more than forecasters expected, as investors continued to look to the Federal Reserve’s interest rate policy as the key factor driving the market.
The Nasdaq Composite (COMP.IND) is +0.8%, the S&P 500 (SP500) is +0.4% and the Dow (DJI) is +0.1%.
Looking to economic news, the PCE price index data was stronger than anticipated, rising 0.3% month-over-month versus the expected increase of 0.2%.
Moreover, personal spending MoM data for August was 0.4%, higher than the forecasted 0.2%. Personal income MoM for August came in at 0.3%, in line with the consensus figure.
Elsewhere, Chicago PMI figures came in softer than the anticipated 51.8 forecast number. Chicago PMI for September was 45.7.
At the same time, September University of Michigan Consumer Sentiment data improved slightly from August. The figure reached 58.6 compared to the prior 58.2 recorded for August.
Turning to the bond market, Treasury yields are broadly flat following a recent string of gains. The U.S. 10 Year Treasury yield (US10Y) is down about a basis point to 3.74%. Meanwhile, the U.S. 2 Year Treasury yield (US2Y) is largely unchanged at 4.17%.
Of the 11 S&P sectors, eight are currently in positive territory, after a majority showed weakness in the early going. Even so, there are no market segments showing a move of over 1% in either direction.
Looking overseas, the annual inflation rate in the Euro Area jumped to 10% in September of 2022 from 9.1% in August. The increase has touched a fresh record high in September, preliminary estimates have shown.
“The US Equity markets remain under pressure as we end Q3,” Citi outlined in an investor note. “Fed hawkishness is exceeding expectations from a quarter ago, as its determination to drive inflation back to the 2% target was reinforced at the latest Fed meeting.”
The firm added: “Gradually, rising rate headwinds on valuation are giving way to concern regarding the economic consequences of current FF rate trajectories.”
Citi noted that while it continues to forecast “earnings resilience into the Q3 reporting period,” there are signs that “inflation readings remain sticky” even as “many economic indicators show signs of deterioration.”