US stocks jump as investors cheer better-than-expected inflation data

• US stocks jumped Friday as investors took in better-than-expected inflation.
• Core PCE, the Fed's preferred inflation measure, rose 0.1% in August, below estimates of 0.2%.

US stocks edged higher on Friday as markets digested cooler-than-expected inflation data. All three benchmark indexes rose higher at the open, with the Dow Jones Industrial Average gaining nearly points.

The core personal consumption expenditures price index, which is the Fed's preferred inflation measure, jumped 0.1% over the month of August and 3.9% year-per-year, the Bureau of Economic Analysis reported. That's slightly better than an expected monthly increase of 0.2%.

"Friday's PCE on a core basis, which removes food and energy prices, suggests that inflation is continuing to decelerate, meaning the Fed's aggressive campaign is working," BMO Family Office chief investment officer Carol Schleif said in a note Friday morning. "The challenge is that core PCE remains almost double the Fed's 2% target, prompting the Fed to keep the possibility of another rate hike in play."

European inflation is also slowing, with prices in the eurozone rising at their lowest pace in two years last month, the European Central Bank said. Inflation climbed 4.3% during the month of August.

US stocks are closing out a tough month, with the S&P 500 on track to end September over 4% lower. The Nasdaq Composite is set end the month 6% lower, while the Dow is set to slide 3%. That marks the second-straight losing month for stocks, and the worst month for the market in 2023

Here's where US indexes stood as the market opened 9:30 a.m. on Friday:

• S&P 500: 4,329.83, up 0.69%

• Dow Jones Industrial Average: 33,837.95, up 0.52% (+174.32 points)

• Nasdaq Composite: 13,328.32, up 0.96%

Here's what else is going on:

• Start snapping up AI leaders again, as the slump in tech stocks has made them undervalued, according to UBS.
• Hedge fund legend Ray Dalio says the US will suffer from a debt crisis and an economic slump.
• Billionaire investor Bill Ackman channeled Warren Buffett when he bet big on Alphabet this spring.

In commodities, bonds, and crypto:

• Oil prices rose, with West Texas Intermediate up 0.75% to $92.40 a barrel. Brent crude, the international benchmark, climbed 0.4% to $95.76 a barrel.
• Gold edged higher 0.8% to $1,893.90 per ounce.
• The 10-year Treasury yield eased 7 basis points to 4.524%.
• Bitcoin climbed 1.93% to $27,003.