U.S. equity index futures rose on Friday morning after the release of the latest inflation data. The May core PCE price index, which is the Federal Reserve’s preferred inflation measure, rose 0.3% month-over-month, in line with expectations. However, the core PCE price index rose 4.7% year-over-year, below the consensus forecast of 4.8%.
The weaker-than-expected inflation reading helped to boost investor sentiment, which had been dampened by recent concerns about a potential recession. The S&P 500 futures were up 0.6%, while the Nasdaq 100 futures were up 0.9%.
“The inflation data was a little bit better than expected, and that’s giving investors a bit of a lift,” said Quincy Krosby, chief investment strategist at LPL Financial. “It’s not enough to change the Fed’s course, but it’s enough to give investors some relief.”
The Fed is expected to raise interest rates by 0.75 percentage points at its meeting next week. However, the weaker-than-expected inflation reading could give the Fed some wiggle room to raise rates by a smaller amount.
“The data is not giving the Fed any reason to panic,” said Krosby. “It’s still elevated, but it’s not out of control.”
In other news, the euro STOXX 600 index rose 1.1%, while the dollar index fell 0.2%. Gold prices were flat, while crude oil prices rose 0.5%.
The next major economic data release will be the June Chicago PMI, which is due out at 9:45 a.m. ET. The final read on June University of Michigan consumer sentiment is due out at 10:00 a.m. ET.