Following a significant reading on consumer inflation, investors continued to bet on interest rate reduction, and US equities rose before of the bell on Thursday, putting them on course for their best month of the year.
S&P 500 (^GSPC) futures increased by around 0.3%, while Dow Jones Industrial Average (^DJI) futures led advances with a climb of almost 0.6%, or more than 200 points. The tech-heavy Nasdaq 100 (^NDX) saw a nearly 0.3% increase in futures.
As we enter the last day of November trading, the stock indexes are approaching new closing highs for 2023. That follows a massive surge driven by hope that interest rate hikes by the Federal Reserve are coming to an end.
The publication of the PCE index, the Fed’s favoured inflation gauge, on Thursday was expected, which gave stocks a boost. The data may strengthen the argument that the Fed is done raising rates for this cycle and may lower rates sooner than previously anticipated.
See more about the implications of the Fed’s rate-hike delay on credit cards, loans, bank accounts, and CDs.
Additionally, the unexpected November decline in euro zone inflation to 2.4% on Thursday was perceived as a challenge to the view taken by the European Central Bank that price increase is unyielding.
All eyes will also be on Thursday’s OPEC+ meeting, which was postponed due to resistance from smaller African producers against the demands of Saudi Arabia and Russia for more production cutbacks. Amid hopes that the parties may come to an agreement on policy, oil prices increased for a third day, with WTI (CL=F) and Brent (BZ=F) crude futures both up around 0.7%.