• The Dow Jones climbed into another fresh peak after PCE inflation print.
• Headline PCE inflation eased closer to Fed targets in August.
• Coming up next week: PMI activity measures, NFP labor print.

The Dow Jones Industrial Average (DJIA) rallied into another fresh record high on Friday, spurred higher by a cooler-than-expected print in the US Personal Consumption Expenditure Price Index (PCE) for August. Sentiment indicators also improved for September, and rate watchers will be pivoting to look ahead to next week’s Nonfarm Payrolls (NFP) report.

The PCE price index rose 0.1% in August, and chalked in PCE inflation growth of just 2.2% YoY, easing to the key inflation indicator’s lowest level since March of 2021. Headline inflation figures continue to ease toward the Federal Reserve’s (Fed) 2% target, but data watchers will note that the annualized core PCE print ticked higher for the year ended August, rising to 2.7% YoY from the previous 2.6%.

The University of Michigan’s (UoM) Consumer Sentiment Index rose again in September, printing at 70.1 compared to the expected 69.3 and even higher than the previous month’s print of 69.0. The UoM’s 5-year Consumer Inflation Expectations survey also held steady at 3.1% as elevated inflation expectations at the consumer level remain pervasive.

With this week’s data docket in the books, Fed watchers will be looking ahead to the next key data print, next Friday’s NFP labor report. Markets will broadly be looking for ongoing strength is the US labor market to further quell concerns about a potential recession looming over the US economy. US Purchasing Managers Index (PMI) business activity results are also expected early next week.