U.S. Stocks Rally on Softer Inflation Data and Strong Economic Momentum
The S&P 500 Index (<$SPX>) (<SPY>) rose +0.34% today, the Dow Jones Industrial Average (<$DOWI>) (<DIA>) edged up +0.07%, and the Nasdaq 100 Index (</$IUXX>) (<QQQ>) surged +0.52%. December E‑mini S&P futures (<$ESZ26>) increased +0.35% and December E‑mini Nasdaq futures (</$NQZ26>) moved up +0.52%.
Equity indices are accelerating as inflation concerns ease following a revision of Q2 core PCE data and a cooler than anticipated August core PCE reading. Better‑than‑expected inflation news has lowered the odds of a Federal Reserve rate hike at the November FOMC meeting to 35 % from 52 % noted earlier in the week. Simultaneously, robust U.S. economic indicators have bolstered market confidence, spurred by a revised positive Q2 GDP, a stronger‑than‑expected jump in September ADP employment, and a historic rise in August personal spending over the past five months.
This article was published on September 30, 2026 by Rich Asplund. The author has no material conflicts of interest.
Interest Rates
December 10‑year Treasury notes (<$ZNZ6>) rose +5 ticks today, pulling the 10‑year yield down 2.1 basis points to 5.234 %. Continued downward pressure stems from easing inflation pressures after the core PCE updates, though the more recent climb in WTI crude oil (+1 %) tempers the upside by reviving inflation expectations. European Government Bond Yields also declined: the 10‑year German bund fell –5.6 bps to 3.570 % and the UK 10‑year gilt moved –0.9 bps to 5.401 %. In Germany, a sharper labor market showed in a stronger unemployment swing (+12,000, above the 500‑bottom line) and modest retail sales growth (+1.3 % monthly). Eurozone economic outlooks improved, with Germany now posting a +2.2 % quarterly GDP revise and a June core PCE of +3.8 % monthly. Analysts have markedly cut the path to tightening, viewing a rate increase at the October 27‑28 FOMC meeting as only a 27 % probability.
U.S. Stock Movers
Software shares led the day’s rally, lifting **Datadog (<DDOG>)** more than 2 % and **Salesforce (<CRM>)** surpassing 2 %, driving the biggest bumps in the Dow Jones Industrial Average. Further momentum came from cloud and tech innovators; companies such as **Adobe Systems (<ADBE>)**, **Atlassian Corp (<TEAM>)**, **Autodesk (<ADSK>)**, **Intuit (<INTU>)**, **Microsoft (<MSFT>)**, **Palantir Technologies (<PLTR>)**, **ServiceNow (<NOW>)**, and **Workday (<WDAY>)** all posted gains over 1 %. The cybersecurity sector also benefited; **Okta (<OKTA>)** rose more than 2 % alongside **CrowdStrike Holdings (<CRWD>)**, **Palo Alto Networks (<PANW>)**, **SentinelOne (<S>)**, and **Gen Digital (<GEN>)**. Additional contributors included **Hewlett Packard Enterprise (<HPE>)**, leading the S&P 500 after boosting its FY2027 networking segment outlook; **Huntington Ingalls Industries (<HII>)**, up more than 2 % after winning a $5.1 billion contract for the USS Harry S. Truman refurbishment; and **Target (<TGT>)**, which gained over 1 % following an upgrade from HSBC targeting $190.
Other Recent Results
A panel of noteworthy earnings and report timelines concluded the day, highlighting **Cal‑Maine Foods (<CALM>)**, **Conagra Brands (<CAG>)**, **FactSet Research Systems (<FDS>)**, **Jabil Inc (< Global sentiment remains bifurcated. U.S. equity trading surged, while outside the United States the Euro Stoxx 50 slipped modestly, and China’s Shanghai Composite and Japan’s Nikkei‑225 posted gains. The ten‑year Treasury retained a yield near 5.23 %, shaped by lingering volatility between dimmed inflation fears and a brief surge in oil prices. As for future policy, markets have adjusted their views: the Fed now assigns roughly a 27 % risk to a 25‑basis‑point hike at the October 27‑28 meeting, while the ECB similarly sees a 27 % chance of tightening during its October discussion.Outlook Summary
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