Global Stocks Rebound Amid Improving U.S. Inflation Data

Global stocks rose on Friday, rebounding from a four-session slump. U.S. economic data indicated an improving inflation landscape, leading to lower Treasury yields. The Fed's preferred PCE price index showed modest gains, aligning with expectations and hinting at possible rate cuts in September. Major U.S. indices rallied, while European shares also saw gains.

Global stocks experienced a bounce-back on Friday following a four-day decline, thanks to favorable U.S. economic data indicating an improved inflation scenario, which sent Treasury yields downward.

The Commerce Department reported that the PCE price index, favored by the Federal Reserve, rose 0.1% last month, meeting economists' expectations. On an annual basis, the index increased 2.5%, aligning with forecasts.

This data augments the possibility of the Federal Reserve cutting rates in September. Brian Jacobsen, chief economist at Annex Wealth Management, noted that the economy is slowing and a rate cut is imperative. The next Fed policy meeting is scheduled for late July.

U.S. stocks, especially small-cap ones, led the market recovery, with the Dow Jones Industrial Average rising 555.71 points, the S&P 500 gaining 49.40 points, and the Nasdaq Composite up by 128.50 points. European markets also saw rises after two days of declines.

U.S. Treasury yields decreased following the inflation data. The 10-year note fell by 6 basis points to 4.196%, heading for a weekly decline. The dollar weakened against the yen and the euro, while crude oil prices also fell.

(With inputs from agencies.)