US jobs and inflation data set to shape Fed rate outlook and market rally
Investors are waiting for the September jobs report and inflation numbers to determine if the Federal Reserve will continue raising rates, a move that could weigh on the stock market.
Near-record equity levels are being tested by expectations around September’s payroll numbers and the forthcoming PCE inflation gauge. Market participants view these releases as the main clues on whether the Federal Reserve, which lifted rates for the first time in three years this month, will keep tightening. Treasury yields have surged to multi-decade highs, raising fears that higher bond returns could pull money out of equities.
Although the S&P 500 stays close to its August peak, eight of eleven sectors are down for the month, with only technology and AI-linked shares posting gains. Analysts from Plante Moran and Miller Tabak caution that an exceptionally strong jobs report could spark a short-term market pullback, while a modest reading might sustain the rally. The PCE index, still above the Fed’s 2% target, will further shape inflation expectations.
Why it matters
The data will signal whether the Fed keeps tightening, affecting borrowing costs and stock market momentum.
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