US Inflation Eases, Wall Street Up To 1 Percent

Wall Street illustration (Photo: Doc. Unsplash)

JAKARTA - Wall Street experienced a gain of more than 1 percent at the end of trading Friday, March 31. This is because inflation is starting to subside which can encourage the Federal Reserve (The Fed) to end an aggressive interest rate hike.

Quoting Antara, Saturday, April 1, the Dow Jones Industrial Average index jumped 415.12 points or 1.26 percent, to settle at 33,274.15 points. The S&P 500 index increased by 58.48 points or 1.44 percent, ending at 4,109.31 points. The Nasdaq Composite Index rose 208.44 points or 1.74 percent, to close at 12,221.91 points posting the largest quarterly percentage increase since June 2020

All 11 major S&P 500 sectors ended up in the green zone, with non-primer and real estate consumer sectors rise 2.62 percent and 2.18 percent, leading the profits, respectively.

For this week, Dow rose 3.2 percent, S&P rose 3.5 percent and Komposit Nasdaq rose 3.4 percent. Meanwhile, for March, Dow rose 1.9 percent, S&P 500 rose 3.5 percent and Nasdaq jumped 6.7 percent.

For the March quarter, Nasdaq soared 16.8 percent in the percentage of the biggest quarterly increase since the three months ended in June 2020. S&P 500 jumped 7.0 percent and Dow rose 0.4 percent,

The market was boosted as the Federal Reserve's preferred inflation gauge rose slightly lower than expected in February.

The US personal consumption expenditure price index (PCE) rose 0.3 percent last month, in line with consensus, for a 5 percent year-on-year increase, the Commerce Department reported Friday (31/3/2023).

The core PCE inflation, which does not include food and energy, is up 0.3 percent, slightly below the 0.4 percent consensus, for an increase of 4.6 percent year-on-year.

"The February PCE inflation is showing an encouraging increase after the January spike, but it's still too high," said Chris Low, chief economist at FHN Financial, in a note on Friday (31/3/2023).

"It still takes more time before the market gets clarity on how the Fed will balance banking tensions with its mission against inflation," he added.

Elsewhere, the consumer sentiment index released Friday (31/3/2023) by the University of Michigan Consumer Survey fell to 62 in March from 67 in February.

"The equity market seems happy with a bit of a decline in inflation, as it should be. This underscores that the Fed campaign, in reality, is working, although it's slow," said waro Krosby, head of global strategy at LPL Financial in Charlotte, North Carolina.