- Stocks closed slightly higher on Thursday ahead of a key update on inflation.
- The May PCE figure is due to be released on Friday morning, providing another hint as to when a rate cut might come.
- Shares of chip makers Nvidia and Micron fell in trading on Thursday, while the Nasdaq Composite Index rose slightly.
U.S. stocks ended modestly higher on Thursday as investors prepared to scrutinize new inflation data, namely personal consumption expenditures for May, due to be released by the Commerce Department on Friday morning.
Bond yields fell ahead of the new data release, with the 10-year Treasury yield down about 2 basis points to 4.292%.
The latest data, released Thursday, suggested a softer PCE report, with the second revised figure for first-quarter GDP showing slightly higher growth than the previous reading, but still significantly lower than the fourth quarter of 2023. Jobless claims fell this week but remained near 10-month highs.
Friday’s PCE will be key. The latest economic data still doesn’t meet the threshold for the Fed to cut interest rates at its next July meeting, but markets still expect the first move to come in September.
“[T]”His soft tone falls just short of the Fed’s benchmark to justify a rate cut at its July 31 decision, especially given that inflation in the U.S. economy retreated more than previously thought in the first quarter,” Comerica Bank chief economist Bill Adams said Thursday. “Recent data has been moving in the right direction, but it’s not enough to convince the Fed that inflation is under control.”
Fed officials have taken a more hawkish stance in recent public comments, with Governor Michelle Bowman saying this week that raising interest rates is open to the possibility if inflation remains sluggish or starts to rise again.
Semiconductor stocks continued to be volatile on Thursday, led by Micron and Nvidia. Micron fell sharply after its guidance failed to impress investors, while Nvidia resumed a sell-off that has wiped billions of dollars off its market capitalization since last week.
Meanwhile, meme stock icon Keith Gill, also known on social media as Roaring Kitty, sparked a rise in Chewy’s stock price after posting a photo of his dog on X.
As of the close of trading at 4 p.m. on Thursday, U.S. stock indexes were as follows:
Commodities, Bonds and Cryptocurrencies:
- Crude oil futures rose. West Texas Intermediate crude rose 1.25% to $81.91 a barrel. Brent crude, the international benchmark, rose 1.4% to $86.46 a barrel.
- Gold rose 1% to $2,337.30 an ounce.
- The yield on the 10-year Treasury note fell 2 basis points to 4.292%.
- Bitcoin rose 0.6% to $61,364.
