Wall St rises after in-line inflation data fuels rate cut hopes

By Amruta Khandekar and Bansari Mayur Kamdar

(Reuters) - Wall Street's main indexes rose on Thursday as a key inflation metric came in line with estimates, raising hopes of interest rate cuts by the U.S. Federal Reserve in the first half of the year.

A Commerce Department report showed the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, climbed 0.3% in January month-on-month, as expected. Prices rose 2.4% on a yearly basis, also matching estimates.

Traders added to bets that the Fed will cut interest rates in June after the PCE data.

Meanwhile, initial jobless claims for the week ended Feb. 24 stood at 215,000, greater than expectations of 210,000, according to economists polled by Reuters.

"(The data) should buoy investors' optimism that the economy is on strong footing ... the Fed has done a very substantial job in controlling inflation and if we are not currently enjoying a soft landing, it is soon to come," said Peter Andersen, founder of Andersen Capital Management in Boston.

Reports on consumer and producer prices earlier in February, which signaled sticky inflation as well as a guarded approach from Fed policymakers, had led investors to push back expectations of rate cuts to June.

At the beginning of this year, traders were betting on March as the starting point for the Fed's easing cycle.

At 09:33 a.m. ET, the Dow Jones Industrial Average was up 120.40 points, or 0.31%, at 39,069.42, the S&P 500 was up 25.07 points, or 0.49%, at 5,094.83, and the Nasdaq Composite was up 126.87 points, or 0.80%, at 16,074.61.

All three major Wall Street indexes are on track for their fourth straight monthly advance, with the tech-heavy Nasdaq in the lead, thanks to robust quarterly earnings and a stellar rally driven by optimism around artificial intelligence (AI).

Ten of the 11 major S&P 500 sub-indexes advanced on Thursday, with rate-sensitive technology stocks leading gains.

Megacap growth companies climbed in early trading, with AI darling Nvidia leading gains.

Snowflake slumped 21.1% after the cloud data analytics company forecast first-quarter product revenue below Wall Street estimates.

Paramount Global climbed 7.2% as the media conglomerate posted a surprise profit on streaming gains.

WW International fell 18.7% after the weight-loss services firm disclosed Oprah Winfrey will exit its board later this year.

Major cryptocurrency firms such as Coinbase Global and MicroStrategy rose over 5% each as bitcoin continued its upward climb.

Software firm C3.ai jumped 22.8% after posting better-than-expected quarterly results.

Meanwhile, the U.S. Congress will make a last-minute attempt to avert a partial government shutdown on Thursday, less than 48 hours before funding for some federal agencies is due to expire.

Advancing issues outnumbered decliners for a 5.25-to-1 ratio on the NYSE and a 4.27-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and no new low, while the Nasdaq recorded 74 new highs and 10 new lows.

(Reporting by Amruta Khandekar and Bansari Mayur Kamdar in Bengaluru; Additional reporting by Johann M Cherian; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)