Stock market today: Dow, S&P 500, Nasdaq rise as PCE inflation data meets expectations

Final results for the University of Michigan’s September consumer sentiment survey released Friday showed sentiment slipped more than expected over the past month.

The index of consumer sentiment fell to 55.1 — lower than the 55.4 projected by economists tracked by Bloomberg as well as the 58.2 in August and 70.3 the prior year.

Preliminary survey results on Sept. 12 had already shown American consumers souring on the economy more than initially expected during the first half of the month, as the director of University of Michigan’s consumer surveys, Joanne Hsu, said participants were concerned over the impact of Trump’s tariffs.

“Interviews this month highlight the fact that consumers feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets,” she said Friday. “Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year.”

Hsu noted some nuances to the final survey results, saying a key exception to American pessimism over the economy was “consumers with larger stock holdings,” a group whose sentiment was steady in September, “while for those with smaller or no holdings, sentiment decreased.”

Sentiment also differed by political affiliation, moving down about 9% for independents and 4% for Republicans, but lifting for Democrats.

Meanwhile, a look at Americans’ inflation expectations for the month offered a slightly more optimistic perspective on the economy.

Year-ahead inflation expectations dropped to 4.7% in September — less than the 4.8% recorded the prior month, a level that was expected to remain unchanged by economists tracked by Bloomberg. Long-term inflation expectations for the next five to 10 years rose to 3.7% in September from 3.5% in August, but that was less than the 3.9% projected by economists.

The fresh data comes after the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, showed “core” inflation easing slightly in August as projected by economists, helping traders maintain confidence in a rate cut from the Federal Reserve at its October meeting.