US stock futures advanced on Wednesday, lifted by softer-than-expected inflation data that strengthened expectations the Federal Reserve may pause rate hikes as early as next month. S&P 500 and Nasdaq 100 futures each rose about 0.4%, while Dow futures added roughly 100 points.
The August reading of the Fed’s preferred inflation gauge, the PCE price index, increased 0.3% on the month, undershooting forecasts of 0.4%. Core PCE, which strips out food and energy, rose 0.2%, also below expectations of 0.3%. On a year-over-year basis, headline PCE inflation came in at 3.4%, compared with consensus estimates of 3.7%. In response, futures markets are now assigning less than a 40% probability to a 25-basis-point rate hike in October.
Most megacap and growth names traded higher. Alphabet and Apple posted modest gains, while Microsoft rose about 1%. Semiconductor stocks also moved broadly higher, with Intel climbing more than 3%.
Despite Wednesday’s advances, overall market performance in September has been uneven, pressured by pronounced bond-market volatility, higher oil prices linked to the US–Iran conflict, and expectations of additional Fed tightening later this year. Even so, both the S&P 500 and the Nasdaq remain on track to notch a second straight quarterly gain.
