Major stock markets pushed higher Friday as traders welcomed data showing a moderation in US inflation, firming expectations the Federal Reserve will start cutting interest rates in September. Wall Street's three main indices rose solidly at the end of a volatile week during which tech stocks and other sectors were rocked by disappointing earnings. The Fed's preferred measure of US inflation -- the personal consumption expenditures (PCE) price index -- fell to 2.
5 percent on an annual basis in June, from 2.6 percent in May. "This provides clear support for the Fed to start cutting interest rates in September," said Kathy Bostjancic, chief economist for Nationwide, adding that the move could lead to "a desired soft-landing for the economy, though risks of a harder landing remain.
" The core PCE price index that excludes volatile food and energy prices held steady at 2.6 percent. The Fed has signaled that it wants to see inflation trending lower to its 2.
0 percent target before cutting interest rates. "To get a rate cut, investors and the Fed only needed to avoid a disastrously high PCE result today," said Bret Kenwell, US investment analyst at eToro online brokerage. Attention will shift to Fed Chair Jerome Powell's comments after the central bank's meeting next week, "with the hope and expectation that he will set the stage for a rate cut in September," he added.
Briefing.com analyst Patrick O'Hare noted the market was now fully pricing in a 0.25-percentage-point cut in the Fe.