US stock index futures continued to strengthen on Friday, as fresh evidence of progress in inflation raised hopes that the Federal Reserve may cut interest rates later this year despite a squeeze on rising inflation.
The production price index of personal expenditures (PCE) rose 0.3% in March, compared with forecasts of a 0.3% increase by economists interviewed by Reuters. In the 12 months to March, PCE inflation rose 2.7% compared to forecasts of 2.6%.
Excluding the volatile food and energy components, the PCE price index rose 0.3% last month compared to forecasts for a 0.3% increase. Annually, it reached 2.8% compared to the forecast of 2.7%.
Read the Dow Jones index rose 122 points, or 0.32%, the S&P 500 futures rose 46.75 points, or 0.92%, and the Nasdaq 100 futures rose 197 points, or 1.12%.
Traders raised bets that the US Federal Reserve will announce its first interest rate cut of the year in September, after a government report on Friday showed US inflation rose last month in line with economists' expectations.
Expectations on interest rates showed a probability of around 65% for a rate cut at the US central bank's mid-September meeting, up from less than 60% before a report that showed the price index for personal expenditure (PCE) rose 0.3% last month from February.
