US PCE Inflation Hits 4.1% in May, Reaching Three-Year High

The unexpected rise in PCE inflation could weaken expectations for a Fed rate cut and negatively impact risk appetite. On the S&P 500 (SPX), the RSI is at 41, indicating a weak zone, while the MACD remains negative below the signal line. The price is trading below both the 20-day and 50-day moving averages, confirming short-term downward momentum. The 1.46% decline over the past 24 hours could deepen further due to the news impact. However, since the market has not yet entered oversold territory, the downside may remain limited.

The unexpected rise in PCE inflation could weaken expectations for a Fed rate cut and negatively impact risk appetite. On the NDX, the RSI is in weak territory at 40, while the MACD continues its negative trajectory below the signal line. The price is trading below both the 20-day and 50-day moving averages, indicating that short-term pressure may persist. With a 3.3% decline over the past 24 hours, the technical outlook is already fragile, and the inflation news could amplify selling pressure. However, since the index has not yet entered oversold territory, the pace of the decline may remain limited.

The DXY is trading at 101.08, with the RSI entering oversold territory at 29.95. The MACD is below the signal line and in negative territory, indicating weak short-term momentum. Trading below the SMA20 and SMA50 confirms a weak technical outlook. Higher-than-expected PCE inflation could reduce Fed rate cut expectations, putting short-term pressure on the dollar. However, the oversold condition suggests a potential for some recovery.

The rise of PCE inflation to 4.1% in May could increase the likelihood of the Fed raising rates, putting pressure on gold prices. GLD’s 24‑hour gain of 1.37% shows strong short‑term momentum, but its MACD remains in the negative zone and its SMA20 lies below SMA50, indicating a weakening trend. With the RSI hovering around 50, it is neither in an overbought nor oversold zone, yet rate expectations pose a risk factor for gold. Consequently, GLD may trend slightly lower in the short term. However, if inflation persists, gold demand could rise, keeping volatility high.