LIVE MARKETS-US stocks take PCE in stride, hold modest gains

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US STOCKS TAKE PCE IN STRIDE, HOLD MODEST GAINS

The main U.S. indexes are modestly higher and little changed after the release of the latest Personal Consumption Expenditures (PCE) report for November.

The S&P 500 .SPX is now up around 0.34% vs. a rise of around 0.35% just before the numbers came out. U.S. stocks had extended gains at the open after U.S. President Donald Trump dialed back his threat of tariffs on European countries.

The U.S. 10-Year Treasury Yield US10YT=RR is unchanged after the data at around 4.27%. The yield ended Wednesday at 4.253%.

The November headline PCE number on a month-over-month basis came in at 0.2%, which was in line with the estimate. The year-over-year print was 2.8% vs. a 2.7% Reuters Poll. The core PCE index on a month-over-month basis came in at 0.2% vs a 0.2% estimate. On a year-over-year basis, the core reading came in at 2.8% vs the 2.8% Reuters Poll.

November personal income month-over-month came in at 0.3%, which was just below the expectation calling for 0.4%. November adjusted consumption came in at 0.5% vs a 0.5% Reuters Poll.

According to the CME FedWatch Tool, the probability that the Fed leaves its current target rate of 3.50%-3.75% unchanged at its January 27-28 FOMC meeting is unchanged at 95% vs. just prior to the release of the economic data. The chance that the FOMC cuts rates by 25 basis points (bps) is 5%.

Looking further out into 2026, interest rate probabilities are now pricing in 43.7 bps of cuts through year-end vs around 43 bps just before the data was released.

S&P 500 sectors are mixed with Communication Services .SPLRCL, up more than 1%, the biggest gainer. Utilities .SPLRCU, down about 0.8%, is the weakest group.

Gold/silver miners .XAU, biotech stocks .NBI, and regional banks .KRX are among the early outperformers.

Here is a snapshot of where markets stood around 10:09 a.m. ET.

(Terence Gabriel)

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