U.S. Stocks Rise as Inflation Data Supports Fed Rate Cut Hopes

Wall Street gained on steady core PCE data, while traders brushed off new tariff announcements. Gold, oil service and utility stocks rallied and European markets posted solid gains.

The Dow advanced 299.97 points (0.7%) to 46,247.29, the S&P 500 climbed 38.98 points (0.6%) to 6,643.70 and the Nasdaq rose 99.37 points (0.4%) to 22,484.07.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.3% in August after rising by 0.2% in July. The price growth matched expectations. The annual rate of growth by the PCE price index ticked up to 2.7% in August from 2.6% in July which was also in line with estimates. Core PCE rose 0.2% in August, with the annual rate steady at 2.9%, boosting Fed rate cut expectations.

Traders largely shrugged off tariff news after President Donald Trump announced a 100% tariff on pharmaceuticals not manufactured in the U.S. He also unveiled a 25% tariff on heavy trucks and a 50% tariff on kitchen cabinets, bathroom vanities, and related products. The new tariffs are scheduled to take effect on October 1st.

Gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.5% to its best closing level in well over thirteen years. crude oil price increase contributed to considerable strength among oil service stocks, as reflected by the 1.6% gain posted by the Philadelphia Oil Service Index. utilities and housing stocks turned in strong performance, moving notably higher along steel, brokerage and natural gas stocks.

Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index slumped by 0.9% while China's Shanghai Composite Index slid by 0.7%. The major European markets moved upwards while the French CAC 40 Index jumped by 1.0%, the German DAX Index advanced by 0.9% and the U.K.'s FTSE 100 Index climbed by 0.8%.

In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.5 bps to a three-week closing high of 4.18%.

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