Cooler PCE trims October hike odds; bitcoin tags $85.6k, then fades

The Fed's preferred inflation gauge came in cooler than expected on September 30. Headline PCE rose 3.4% year on year (0.3% on the month) and core PCE 3.0%, against a 3.3% consensus for core. CME FedWatch put the chance of an October 25bp hike at about 34.9%, against a roughly even split a day earlier and about 71% a week ago. Traders pushed the next expected hike out to December.

Markets

Wall Street's reaction was mixed, and sources differ on the final closes. One tally had the Dow down about 0.3% at 51,473.88 and the S&P 500 roughly flat near 7,682.28 (-0.17%) after early gains. Another had the Nasdaq leading higher intraday on tech.

In Europe the STOXX 600, DAX and FTSE 100 were each reported up about 0.7%, though the STOXX 600 was still heading for a loss of nearly 2% in September, its first monthly decline in six months. I could not find a reliable CAC 40 close.

Commodities

Brent was quoted anywhere from about $97 to $102.6 a barrel depending on the source and the time of day, so treat the level as approximate. Gold was near $4,167 an ounce, down about 0.4% on the day and about 6% over the past month.

Crypto

The tape shows the PCE reaction clearly. Bitcoin rose 1.6% in the 12:00 UTC hour, peaking at $85,649.95 in the 13:00 UTC hour. It gave back the gain and, as of 18:55 UTC, traded at $83,936, up 0.3% from the 00:00 UTC open of $83,663.66.

Ether was flat at $2,679 (+0.0%). BNB rose 1.3% to $768, XRP gained 0.3% to $1.495, dogecoin rose 0.1% to $0.0940, and Solana slipped 0.4% to $118.71. All figures are against the same 00:00 UTC open.

On regulation, nothing new broke in the window. The CFTC chair has said his staff are exploring crypto market-structure rules under existing authority, while the CLARITY Act remains stalled in the Senate.

What it means for crypto trading

Easing hike fears did not produce a sustained bid: bitcoin sold the news, and the $85.6k high is now the level to beat. With the October hike only about a one-in-three call, the next driver is pricing for a December hike and the next run of inflation and jobs data.

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