Today, U.S. equities moved higher after the PCE report came in line with expectations and eased an immediate concern that inflation was accelerating again. The Dow Jones Industrial Average led gains, advancing about 391 points intraday while the S&P 500 and Nasdaq also closed up.
Treasury yields were mixed but broadly stable: the 10-year note traded near recent levels and the 30-year remained around the mid‑4% range, which helped risk assets to recover after a pullback earlier in the week. Markets are still parsing whether stronger growth signals will narrow the window for multiple Fed cuts this year (30‑year yield reference).
Investors continue to price in policy easing later this year, though probabilities shifted slightly after mixed economic prints; traders are watching incoming labor and inflation data for confirmation. Flow patterns show a modest rotation into cyclical names benefiting from tariffs and away from some high‑momentum AI names that underperformed earlier.
Why it matters: the market reaction underscores a common rule — “no worse than expected” macro prints often favor risk assets, but the durability of this move depends on whether growth and labor data keep surprising to the upside, which would push back on the Fed’s cut cadence.
