US Stocks Extend Rally Amid Cooling Inflation

US equities continued their upward trajectory for a third consecutive week, buoyed by reassuring economic data that suggests a potential soft landing for the economy. Despite a minor pullback on Friday, investors remained optimistic as inflation indicators and consumer sentiment data painted a favorable picture.

The S&P 500 index displayed resilience throughout the week, fluctuating between small gains and losses. The Nasdaq 100, however, faced downward pressure due to concerns over Nvidia’s business prospects in China. Meanwhile, the US dollar weakened, while Treasury yields declined, reflecting expectations for further interest rate cuts by the Federal Reserve.

A key catalyst for the market’s positive momentum was the release of the PCE price index, which showed a moderate increase in August. This data aligned with recent economic indicators, reinforcing investors’ confidence in the economy’s health.

China’s stimulus measures and interest rate reductions by several central banks globally also contributed to the upbeat market sentiment. Looking ahead, the upcoming jobs report will provide crucial insights into the labor market’s condition and potentially influence the Federal Reserve’s monetary policy decisions.

As the market continues to anticipate a potential soft landing, investors are finding comfort in the strength of economic data. The recent inflation print aligns with the Federal Reserve’s assessment of a cooling economy without a significant downturn.

Beyond the US, global markets also experienced positive momentum. Europe’s stock markets reached new all-time highs, while China’s CSI 300 Index recorded its best week in over a decade. In the commodity market, oil prices rose due to heightened tensions in the Middle East.