The indexes are ending a stellar first half of 2024 with losses, even after an encouraging inflation report

• US indices ended the day lower despite market excitement over the latest PCE data.

• Both total and core personal consumption expenditures were 2.6% on an annual basis.

• The stock market finished the first half of 2024 strong, with the S&P 500 up nearly 15%.

US indexes fell on Friday after temporarily hitting new records as investors celebrated the latest inflation report.

The personal consumption expenditures price index, an inflation gauge favored by the Federal Reserve, fell to its lowest level in three years. Both core and total PCE fell to 2.6% year-over-year in May, just below the previous month’s figures.

Personal spending also rose month on month, with spending on real goods recovering after a weak April.

“The soft inflation data will provide evidence that the Fed can start cutting rates in the coming months,” said Jeffrey Roach, chief economist at LPL Financial. “As long as incomes grow in a healthy way, consumers will continue to spend. The key is the labor market and that is why we must now shift our attention to next week’s non-farm payroll for a fresh look at the labor market.”

Although this did not change monetary policy expectations in May, investors remain convinced of interest rate cuts this year. Currently, futures markets prizes at the odds of two

The soft inflation numbers weren’t enough to keep the indexes in the green through Friday, but the stock market still finished the first half of 2024 strong. On an annual basis, the S&P 500 gained 14.1%, surpassed by the Nasdaq’s 16.6%. increase.

“But there are still areas of relative weakness,” wrote Trade Nation senior market analyst David Morrison. “The old-school Dow Jones managed just 4%, while the Russell gained just a paltry 1%. Could these be harbingers of future weakness, or will they take over as market leader in the second half?”

One of the issues at hand now is a worrying bifurcation of the market, with only a handful of stocks actually leading index gains. At the same time, interest rates remain high as a sign of a slowing economy, which is the case with Nvidia $430 billion blipped this week raised concerns about the long-term prospect of an AI-led bull run.

Here’s where the US indexes stood at 4pm on Friday:

Here’s what else is happening today:

The story continues

In commodities, bonds and crypto:

• West Texas average Crude oil fell 0.53% to $81.3 per barrel. Brent crude oilthe international benchmark, traded 0.18% lower to $84.77 per barrel.

• Gold fell 0.12% to $2,326. per ounce.

• The yield on ten-year government bonds rose by 6 basis points to 4.349%.

• Bitcoin essentially flat at $60,809.21.

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