The U.S. stock market closed higher, with major indexes — Dow Jones Industrial Average, S&P 500 and Nasdaq Composite — rising modestly as investors responded positively to the latest inflation data and growing expectations that the Federal Reserve might cut interest rates soon.
The inflation gauge favoured by the Fed — the core PCE — came in broadly in line with expectations, which reassured markets and renewed hopes for a near-term rate cut.
Technology and AI-linked stocks helped power the rally. Palantir Technologies outperformed heavyweights like Nvidia, while select other companies posted strong earnings, lifting sentiment broadly.
Nevertheless, some segments — especially small-cap stocks — lagged behind, suggesting that while large-cap and tech shares remain the main engines, the broader market’s participation remains uneven.
Looking ahead, markets are keeping a close eye on upcoming central-bank decisions, further inflation readings, and earnings results, which will likely shape whether this optimism endures or fades.