Markets Brace for August PCE Data as Tech Stocks Waver Amid Rate Cut Uncertainty
Markets Brace for August PCE Data as Tech Stocks Waver Amid Rate Cut Uncertainty
U.S. stock futures remained largely unchanged this morning as investors keenly await the release of August’s Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. The report, expected to show an uptick in inflation, is poised to influence market sentiment regarding potential Fed interest rate cuts.
Futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all saw minimal movement, hovering near the flatline. This cautious stance follows a turbulent Thursday, where all three major U.S. indexes declined.
Recent strong economic data, including solid jobs figures and an upward revision of second-quarter GDP to 3.8%, has introduced uncertainty. While markets are pricing in two quarter-point rate cuts by the Fed, robust economic health could give the central bank less incentive to ease monetary policy, potentially dampening bullish sentiment.
Major artificial intelligence players like Oracle, Meta, and Tesla experienced pullbacks on Thursday, with Oracle losing 5.6%. This reflects growing investor concerns about elevated tech valuations and the inherent risks within the interconnected AI industry. The S&P 500 is down nearly 0.9% week-to-date, with the Nasdaq Composite losing about 1.1% and the Dow shedding 0.8%.
Despite the recent losses, some market participants, like Andrew Slimmon of Morgan Stanley Investment Management, view any weakness as a buying opportunity, particularly in the tech sector. Slimmon suggests the pullback is a healthy correction for a market that had become vulnerable to speculation.
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