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Dow Jones celebrates comeback: inflation data causes markets to sprout!
Wall Street recovers on October 4, 2025: Dow rises 350 points after positive PCE inflation data and stable labor market numbers.
Dow Jones celebrates comeback: inflation data causes markets to sprout!
On Friday morning, US stock markets rose significantly in response to the latest inflation data. The Dow Jones Industrial Average recorded an increase of over 350 points. This development for October 4, 2025 was supported by positive news related to the core personal consumption expenditure (PCE) index, which stood at 0.29% year-on-year in August. After three days of losses, Wall Street recovered noticeably, which pleased investors.
Commerce Department data showed the PCE index rose a seasonally adjusted 0.29% in August. This measurement of inflation corresponded to the expectations of economists. Additionally, core PCE rose 0.2% month-on-month in August, which was also in line with analyst consensus. As a result, the S&P 500 gained 0.5% and the Nasdaq Composite gained 0.4%.
Market developments and interest rate expectations
The market's positive reaction was also driven by solid labor market data. Investors, meanwhile, are eyeing impending interest rate cuts, with two more cuts of 0.25% each on the horizon in 2025. The Federal Reserve's next meetings are scheduled for October and December. Analysts report that the PCE data is helping to stabilize markets.
TradeStation's David Russell noted that jobless claims and gross domestic product revisions have undermined dovish expectations in recent weeks. This shows how sensitive the markets are to financial policy decisions and economic indicators.
Mohamed El-Erian, a leading economist, said the current data confirms a strong economy. The ongoing inflation, which is close to 3%, is not disrupting analysts' long-term expectations. Despite positive sentiment in the stock market, Bitcoin (BTC) remained weak, falling below the $110,000 mark after declines this week. In contrast, gold held near record highs.
Overall, recent market developments suggest that positive economic indicators and the prospect of fiscal measures can boost investor sentiment. These trends could indicate a more stable market that is recovering despite the challenges in recent weeks.
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