NASDAQ 100, Dow Jones, S&P 500: Aim for Strong Monthly Performance Ahead of PCE Data

Highlights

• U.S. equity futures show positive signs as investors await PCE data.
• S&P 500 and Nasdaq on track for impressive monthly and quarterly gains.
• Investors focus on PCE data and its impact on Fed’s policy decisions.

Overview

U.S. equity futures are showing positive signs as investors eagerly await the release of the latest personal consumption expenditures (PCE) data, which serves as a key measure of inflation preferred by the Federal Reserve. Friday is a significant day for investors, marking the end of June, the second quarter, and the first half of the year. Let’s take a closer look at the performance of major indexes and key economic indicators.

At 09:40 GMT, blue chip Dow Jones futures are trading 34410.00, up 57.00 or +0.17%. Benchmark S&P 500 Index futures are at 4449.50, up 13.75 or +0.31% and the tech-weighted Nasdaq Composite is trading 15176.75, up 76.50 or +0.51%.

S&P 500 Up about 5.18% in June

In terms of monthly performance, the S&P 500 has gained 5.18% in June, heading for its best monthly performance since January. The Nasdaq has also advanced 5.07%, with both indexes on track for a fourth consecutive positive month. The Dow has climbed 3.69%, aiming for its best month since November.

Nasdaq Poised for 11.2% Second-Quarter Gain

Looking at the second quarter, the S&P 500 has risen 6.99%, set for a third straight quarter of gains. The Nasdaq boasts a gain of 11.2%, marking back-to-back positive quarters. The Dow has jumped 2.55%, also heading for a third winning quarter.

S&P, Nasdaq up Double-Digits in 2023 While Dow Struggles

Year-to-date and for the first half of the year, the S&P 500 has risen by an impressive 14.51%, on pace for its best first half since 2018. The Nasdaq has surged nearly 30%, tracking for its best first half since 1983. The Dow has experienced a more modest gain of 2.94%.

Additionally, the major averages are on track for winning weeks, with the S&P 500 and Dow up more than 1% each, and the Nasdaq tracking for a 0.7% increase.

Core PCE:  0.3% Expected Rise

Investors’ focus is now on the May core PCE data, scheduled for release at 12:30 GMT on Friday. Economists predict a 0.3% increase in the core PCE price index, with an annual growth rate of 4.7%. This data will play a crucial role in shaping the Federal Reserve’s future interest rate policy decisions.

Treasury Yield Volatility Expected

U.S. Treasury yields have risen as investors brace themselves for the PCE data, which is the Fed’s preferred inflation gauge. The 10-year Treasury yield is up over three basis points to 3.8858%, while the 2-year Treasury yield has also increased by more than four basis points to 4.9268%.

PCE Data Sets the Tone

In conclusion, investors are closely monitoring the PCE data release and its potential impact on the Federal Reserve’s monetary policy decisions. Despite strong economic data, the Fed remains focused on addressing inflationary pressures. The performance of major indexes and the trajectory of Treasury yields reflect investors’ anticipation and reaction to these economic indicators.