The Dow Jones rose 450 points on Thursday as sentiment recovered.
US GDP figures bolstered investor confidence after printing above expectations.
US PCE inflation numbers still loom ahead on Friday.
The Dow Jones Industrial Average (DJIA) rose 1.1%, or 450 points, on Thursday, buoyed by a forecast beat in US Gross Domestic Product (GDP) growth numbers in Q2. US Personal Consumption Expenditure Price Index (PCE) inflation data, due on Friday, is still the key print of the week. Markets remain confident that the Federal Reserve (Fed) is on pace to kick off a rate-cutting cycle in September.
US Q2 GDP beat forecasts Thursday morning, propping up market sentiment and sending investors back into a bidding stance. Annualized Q2 GDP came in at 3.0% compared to the expected hold at 2.8%, and Initial Jobless Claims also ticked down to 231K for the week ended August 23. Investors had expected a print of 232K compared to the previous week’s revised 233K.
US core PCE inflation on Friday is expected to hold steady MoM and drift slightly higher on an annualized basis. July’s MoM core PCE inflation is forecast to hold at 0.2%, while the YoY figure for July is expected to tick up to 2.7% from the previous 2.6%. A below-expectations print will send markets piling back into hopes for an extended initial cut from the Fed on September 18, while an above-forecast release could send traders scurrying in the face of a potential resurgence in inflation, hobbling the Fed just before a widely-expected cut.
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