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U.S. STOCK FUTURES HOLD GAINS AFTER PCE

The main U.S. equity index futures are holding their gains after the release of the latest Personal Consumption Expenditures (PCE) report, and jobless claims.

E-mini S&P 500 futures EScv1 are up around 0.9% which is roughly flat with where they were just before the numbers came out. The futures were already gaining on Microsoft's MSFT.O and Meta Platforms' META.O AI-powered results.

The June headline PCE number on a month-over-month basis came in at 0.3%, which was in line with the estimate. The year-over-year print was 2.6% vs a 2.5% Reuters Poll. The core PCE index on a month-over-month basis came in at 0.3% vs a 0.3% estimate. On a year-over-year basis, the core reading came in at 2.8% vs the 2.7% Reuters Poll.

June personal income month-over-month came in at 0.3%, which was above the 0.2% estimate. June adjusted consumption came in at 0.3% vs a 0.4% Reuters Poll.

Separately, initial jobless claims were 218k vs a 224k estimate. Q2 employment costs came in at 0.9% vs a 0.8% Reuters Poll.

According to the CME's FedWatch Tool, the probability that the Fed leaves rates unchanged at its September 16-17 meeting is unchanged at around 61% from just prior to the release of the economic data. The chance that the FOMC cuts rates by 25 basis points is 39%.

Looking further out into 2025, the FedWatch Tool is still showing a bias for an October rate cut. That said, interest rate probabilities are now pricing in 34.9 basis points of cuts through year-end vs 35.4 bps just before the data.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.36%. It was around 4.34% just before the numbers came out. The yield ended Wednesday at 4.378%.

A majority of S&P 500 sector SPDR ETFs are lower in premarket trade with Materials XLB.P, off about 1%, taking the biggest hit. Communication Services XLC.P, up about 2%, and Tech XLK.P, up about 1.6%, are posting the biggest gains.

The SPDR S&P regional banking ETF KRE.P is off around 0.8%.

In terms of additional data of note today, July Chicago PMI is expected at 09:45 a.m. EDT. The estimate is for 42 vs 40.4 last month.

Here is a premarket snapshot from 08:51 a.m. ET:

(Terence Gabriel)

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EARLIER LIVE MARKETS POSTS:

AUGUST: "TAKE PROFITS AND RELAX ON THE BEACH" CLICK HERE

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"SOMEWHAT HAWKISH" BOJ UNLIKELY TO IMPACT JAPANESE EQUITIES CLICK HERE

THAT’S WHY TARIFFS MIGHT PROMPT THE FED TO CUT RATES CLICK HERE

STOXX RISES AS INVESTORS JUGGLE EARNINGS, FED, TARIFF SURPRISES CLICK HERE

EUROPE BEFORE THE BELL: FUTURES HIGHER ON HEAVY EARNINGS DAY CLICK HERE

DANGERS ABOUND AHEAD OF DEADLINE DAY CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)