Wall Street Stocks Advanced After a Weak Measure of Inflation Cooled

Barry Adams
31 Mar, 2023
New York City

Stocks accelerated gains for the week, month and quarter after investors hoped that the ongoing regional bank crisis has stabilized. 

Regional bank stocks rebounded after worries of more bad news in the sector eased. 

Market sentiment also improved after an alternative measure of inflation showed a slower pace of inflation. 

In the first quarter, the S&P 500 index added 7.0% and the Nasdaq Composite index increased 16.8%.

The Nasdaq Composite index registered its best quarterly return since the second quarter 2020 when the tech heavy index advanced 30.6%. 

 

PCE Price Index Eased In February 

The personal consumption price index increased 0.3% in February, slower than 0.6% in January when measured on a monthly basis, the U.S. Bureau of Economic Analysis reported Friday. 

Core PCE price index, which excludes food and energy, increased 0.3%, slowest in five months and matched the rate in October 2022.  

The watered down measure of inflation, the preferred inflation gauge by the Federal Reserve, increased 5.0% when measured on an annual basis in February. 

The PCE Price index rose at the slowest pace since September 2021. 

Core PCE price index, which excludes food and energy, slowed to 4.6% from 4.7% in January.  

The PCE price index is the Federal Reserve's preferred measure of inflation, but the gauge also understated price increases by a large margin for most urban households. 

 

Indexes & Yields 

The S&P 500 index advanced 0.9% to 4,088.64 and the Nasdaq Composite index added 1.3% to 12,165.55. 

The yield on 2-year Treasury notes was nearly unchanged at 4.1%, 10-year Treasury notes traded at 3.51% and the 30-year Treasury bonds fetched 3.70%. 

Crude oil increased $1.14 to $75.10 a barrel and natural gas prices edged up 10 cents to $2.21 a thermal unit. 

 

U.S. Stock Movers 

Nikola Corp decreased 11.1% to $1.25 after the electric-truck maker announced a secondary stock offering of $100 million priced at a 20% discount to Thursday's closed price.  

Digital World Acquisition Corp increased 6.8% to $13.97. The SPAC linked to former President Donald Trump rose after the New York City Grand Jury formally indicted according to a report by NBC. 

Donald Trump is expected to be arraigned as early Tuesday..   

Virgin Orbit Holdings Inc plunged 36.8% to 22 cents after the space technology company said it plans to stop all operations immediately and lay off about 90% of its staff. 

BlackBerry Ltd increased 14.1% to $4.57 after the company reported lower-than-expected revenue and a smaller loss per share in its latest quarter.