Fed's preferred inflation gauge and second quarter GDP: What to know this week

Published On Sep 22, 2024, 7:34 AM

This article discusses the recent Federal Reserve interest rate cut and its implications for the U.S. economy and markets. Following the rate cut, there was a positive market reaction, with major stock indices like the S&P 500, Dow Jones, and Nasdaq posting gains. The report underlines the upcoming releases of key economic data, specifically the second quarter GDP and Personal Consumption Expenditures (PCE) index, which could provide insights into economic strength and inflation. Major companies including Costco, Micron, and Accenture are slated to announce quarterly earnings which could also impact market sentiment. Tech stocks, especially those in the 'Magnificent Seven', have seen momentum after the rate cut, indicating a potential return to growth amid concerns about future earnings growth performance.

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Stock Forecasts

AI prediction results, not representative of any investment advice.

SPY View SPY chart on TradingView

Positive

The positive market response following the Fed's rate cut suggests continued investor optimism, particularly in tech stocks. However, the release of GDP and PCE data this week could introduce volatility based on the economic outlook. If the PCE shows inflation is under control, it support the current growth momentum. Conversely, disappointing GDP figures may dampen expectations. Investors should watch these data releases closely to gauge direction.

COST View COST chart on TradingView

Positive

Given the positive context around the Fed's actions and the favorable tech sector developments, Costco is also positioned to potentially benefit from strong quarterly earnings. If the earnings report meets or exceeds expectations, it may lead to further gains in the stock price.

ACN View ACN chart on TradingView

Negative

However, uncertainty surrounding the overall labor market and future economic indicators could weigh on investor confidence. If the upcoming data reveals signs of slowing economic activity, especially regarding employment, it could lead to a negative sentiment shift across markets, possibly affecting stocks like Accenture, which are sensitive to economic cycles.

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