The Dow Jones Industrial Average (DJIA) pulled back on Friday, dipping below the 45,500 mark after fresh US Personal Consumption Expenditures (PCE) inflation data showed another uptick in price growth. The report, which came in line with forecasts, weighed slightly on equities as investors reassessed the inflation outlook.
Despite the setback in the Dow Jones Industrial Average, the index remains close to record territory, holding within reach of its all-time high above 45,760. Momentum has cooled for now, but intraday support around 45,500 suggests the market’s underlying strength remains intact.
US core PCE inflation climbed to 2.9% year-over-year in July—the highest level since March. The increase underscores how tariff-related price pressures continue to filter into the broader economy, undoing months of progress in curbing inflationary momentum.
Source: create.vista.com
Rate Cut Expectations Still Firm
Even as inflation edges higher, traders continue to anticipate a rate cut at the Federal Reserve’s September 17 policy meeting. CME’s FedWatch Tool shows nearly 90% odds priced in for a quarter-point reduction.
The Fed may find itself under pressure to act sooner rather than later, particularly as labor market conditions weaken. Employment data has already shown a sharp slowdown through the second quarter, and another poor jobs report—expected next week—could strengthen the case for an early rate cut, even before inflation fully aligns with the Fed’s 2% target.
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