"Stocks got some help from a report showing that inflation in the United States accelerated to 2.7% last month from 2.6% in July, according to the measure of prices that the Federal Reserve likes to use. While that's above the Fed's 2% target, and it's more painful than any household would like, it was precisely what economists had forecast. That offered some hope that the Fed could continue cutting interest rates in order to give the economy a boost."
"The Fed just delivered its first rate cut of the year last week, and officials had penciled in more through the end of next year. Fed Chair Jerome Powell has warned, though, that plans may have to change quickly. That's because cuts to rates carry the risk of worsening inflation. One factor threatening to push inflation higher is President Donald Trump's tariffs, and he announced a set of more late Thursday."
Most U.S. stocks rose Friday, with the S&P 500 up 0.2% and four of five S&P stocks climbing. The Dow gained 211 points (0.5%) while the Nasdaq dipped 0.1% because several major technology firms fell. Inflation accelerated to 2.7% year-over-year from 2.6% in July on the Fed’s preferred measure, matching economists’ forecasts and remaining above the 2% target. The inflation reading supported hopes for further Federal Reserve rate cuts after the first cut of the year, helping keep indexes near recent record highs. New tariffs announced by President Donald Trump pose upside inflation risks.
Read at Fast Company
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