US stock markets began Friday's trading session with cautious optimism, registering slight gains as investors braced for the release of a critical inflation report. The focus was squarely on the Federal Reserve's preferred measure of price pressures, which could influence the central bank's future interest rate decisions.
Markets Await Key Inflation Signal
All eyes were on the upcoming release of the Personal Consumption Expenditures (PCE) price index for September. This report, including the core measure that strips out volatile food and energy costs, is the Federal Reserve's favoured gauge for inflation. The data, due later on Friday, was expected to provide crucial clues about the persistence of price pressures in the economy.
Opening Bell Sees Modest Gains
At the opening bell, the major indices ticked higher. The Dow Jones Industrial Average rose by 28.7 points, equivalent to a 0.06% gain, reaching 47,879.6. The broader S&P 500 index advanced by 9.2 points, or 0.13%, to 6,866.32. Technology stocks led the way, with the Nasdaq Composite climbing 62.6 points, a rise of 0.27%, to settle at 23,567.77 at the open.
Interest Rate Expectations and Bond Market Pressure
Market participants have largely factored in an interest rate cut by the Federal Reserve next week, with further monetary policy easing anticipated through 2026. However, the bond market experienced significant pressure. Treasuries were on track for their worst weekly performance since June. The yield on the benchmark 10-year US Treasury note, which moves inversely to its price, edged higher by 1 basis point to 4.11%.
This combination of a steady stock market open and a struggling bond market highlighted the investor caution prevailing ahead of the pivotal inflation data. The outcome of the PCE report is seen as a major determinant for near-term market direction and the Fed's policy path beyond the widely expected near-term adjustment.
