Gold prices set for weekly gains on tariff caution; PCE data awaited
Investing.com-- The S&P 500 rebounded Friday, snapping a three-day losing streak as Treasury yields dropped after an in-line inflation offset concerns about a flurry of new trade tariffs from President Donald Trump.
At 1:36 p.m. ET (17:36 GMT), the blue-chip Dow Jones Industrial Average had climbed by 350 points, or 0.8%, the benchmark S&P 500 jumped 0.6%, and the tech-heavy Nasdaq Composite increased 0.4%. Despite the jump in
PCE inflation meets expectations, Fed’s Bowman repeats call for rate cuts
The August PCE price index data, the Fed’s preferred inflation gauge, was released earlier Friday, and investors have been boosted by the numbers coming in largely as expected amid fears that the Trump administration’s tariffs policies would lead to higher prices. .
The underlying measure of PCE inflation cooled to 0.2% month-on-month and matched July’s pace of 2.9% on an annualized basis, as widely expected. Fed policymakers often closely monitor this metric to judge the state of price gains in the world’s largest economy.
Following the data, Federal Reserve Vice-chair for Supervision Michelle Bowman continued to call on the Fed to "act decisevly," suggesting that further rate cuts are needed amid a soft jobs market and timid inflaiton.
“Recent data show a materially more fragile labor market along with inflation that, excluding tariffs, has continued to hover not far above our target,” Bowman said.
The markets from Bowman, who is well known as more dovish leaning member of Fed, paled in comparison with that of Chairman Federal Reserve Chair Jerome Powell.
Earlier this week, Powell signaled that a patient approach to further rate cuts were needed as Fed has to balance the risks of higher unemployement and faster inflation.
Data released on Thursday highlighted some strength in the world’s biggest economy. Second-quarter gross domestic product data was revised upwards to reflect much stronger growth in the economy than initially expected.
Intel benefits as U.S. reportedly seeks to cut reliance on chip imports
The Wall Street Journal reported that White House is considering a new policy that would require U.S. tech firms to match their domestic semiconductor output with imports or face tariffs.
The move is likely to boost demand for semiconductors from chip producers with a strong domestic presence.
Intel Corporation (NASDAQ:INTC) jumped 4% and GlobalFoundries Inc (NASDAQ:GFS) climbed 8%.
Trump announces new tariffs
Elsewhere, Trump announced a flurry of trade tariffs late Thursday, most notably a 100% levy on all “branded and patented” pharma products, although drugmakers building manufacturing facilities in the U.S. will be exempt from these levies.
He also announced a 25% tariff on heavy trucks, a 50% tariff on kitchen and bathroom fittings, and a 30% tariff on upholstered furniture.
Trump’s pharma tariff threats had drawn billions of dollars in U.S. investment from major global drugmakers earlier this year.
Thursday’s duties are the latest in Trump’s sectoral tariffs, with the president having imposed steep levies on several sectors, including automobiles, steel, and electronics, earlier this year.
Major pharma stocks, such as Johnson & Johnson (NYSE:JNJ), Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY), will be in the spotlight Friday as a result.
(Peter Nurse, Scott Kanowsky and Ambar Warrick contributed to this article.)