The Money Edit

Opening bell

Opening bell

S&P futures 0.3%
Core PCE inflation 3.0% annual
30Y Treasury 5.56%
Nikkei 225 2.0% to 66,826
WTI crude 0.9% to $90.17

Inflation cools, futures rise, long yields still climbing

Overnight

US stocks slipped on Tuesday, with the S&P 500 down 0.17% to 7,670.84, the Dow down 0.26% to 51,349.92, and the Nasdaq Composite down 0.09% to 26,797.54. Asia was mixed overnight, as Japan's Nikkei 225 jumped 2.0% to 66,826 while Hong Kong's Hang Seng slipped 0.2% to 24,472 and Korea's Kospi fell 0.4%. European index futures pointed higher, with DAX and FTSE contracts up 0.5% and the CAC 40 up 0.3%, and S&P 500 futures rose about 0.3% once the 8:30am inflation report landed below forecasts.

What to watch

The August PCE report, which is the inflation gauge the Federal Reserve actually targets, came in cooler than expected, with prices up 0.3% on the month and the core reading, which strips out volatile food and energy, up 0.2% and running at 3.0% over the year. That has cut the market implied odds of another rate rise next month to roughly 51.5% from 70% on Monday, so the thing to watch is whether long term yields follow, because the 30 year Treasury yield has pushed above 5.5% to its highest since 2002. Micron reports after the close with Wall Street looking for about $51.5 billion in revenue, which makes it the clearest read yet on whether the AI memory boom is still running.

Sources