PARIS, June 28 (Reuters) – The New York Stock Exchange opened flat on Friday after the publication of a U.S. inflation indicator that was in line with expectations, which somewhat revived the prospect of an imminent cut in key interest rates.
In early trading, the Dow Jones index gained 3.27 points, or 0.01%, to 39,167.33 points and the broader Standard & Poor’s 500 rose 0.09% to 5,487.84 points.
The Nasdaq Composite gained 0.07%, or 12.98 points, to 17,871.667.
An hour before Wall Street opened, the Commerce Department said the PCE price index, the Federal Reserve’s preferred measure of inflation, stagnated in May after rising 0.3% in April, while its annual rate slowed to 2.6% from 2.7% the previous month, in line with forecasts from economists polled by Reuters. Core PCE inflation also came in in line with expectations at 0.1% and 2.6%, respectively, after rising 0.3% and 2.8%.
Those indicators are fueling hopes of a Fed rate cut in September, as central bank officials suggested at their June meeting that monetary easing would not happen before December.
Traders now put the probability of a Fed rate cut in September at 68%, versus 61% before the data was released.
“This is a perfect report: it gives the Fed the green light to cut rates in September and sets the stage for the continuation of the dovish rhetoric we will hopefully hear at the July meeting,” wrote Jay Woods, chief strategist at Freedom Capital Markets.
“It shows that the Fed’s measures are working and confirms that (the hypothesis) of a soft landing (of the economy) is still possible,” he adds.
On the bond market, the yield on ten-year US Treasury bonds fell more than two basis points, to 4.2649%, while the two-year bond, more sensitive to inflation, dropped more than four points, to 4 .6767%.
In corporate news, groups linked to former US President Donald Trump, such as Trump Media & Technology Group, Phunware and Rumble, rose 0.23% to 3.04% following the first debate in the November US presidential election, in which Democratic President Joe Biden performed poorly against his Republican rival.
Nike fell 17.11% after announcing that it anticipated a drop in its turnover for the 2025 financial year in a context of contraction in demand and increased competition. In its wake, Under Armor fell by 1.89%, On Holding by 1.94% and Deckers Outdoor by 1.69%.
Apple takes 0.64%, a research firm having indicated that the group’s smartphone deliveries in China increased by 39.6% in May, which confirms the recovery observed in March and April.
