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Brent slips 2% as PCE looms with an October hike at 73%

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Oil eased and US stocks recovered from their lows on Tuesday, but the day's setup is August PCE inflation, with markets pricing a 73% chance of an October Fed hike.

Brent slips 2% as PCE looms with an October hike at 73%

Brent crude fell about 2.1% over the past 24 hours to roughly $103.8 a barrel (as of September 29), and Wall Street closed lower for a second straight session but well off its lows, even as Treasury yields reached fresh multiyear highs. The focus now turns to the Fed's preferred inflation gauge, due today.

What to watch

  • August PCE inflation (today, September 30): economists expect the headline index up 0.4% from July and the core measure up 0.3%.
  • October FOMC (October 27-28): CME FedWatch puts the probability of a rate hike at 73%. Fed Governor Michael Barr has said further policy adjustments are likely to be needed.
  • September jobs report (October 2): forecast at 100,000 new jobs, with unemployment rising to 4.2%.

Markets

At Tuesday's close the S&P 500 fell 0.17% to 7,670.84, the Dow lost 131.59 points (0.26%) to 51,349.92, and the Nasdaq Composite slipped 0.09% to 26,797.54. All three indexes finished off their session lows.

In Europe the Stoxx 600 rose 0.7%, a third consecutive gain, led by semiconductors such as ASML, STMicroelectronics and Infineon. The regional indices diverged: the DAX gained 0.10% to 25,399.21, while the CAC 40 fell 0.53% to 8,035.87 and the FTSE 100 fell 0.45% to 10,636.71.

Commodities

Brent was down 2.13% over 24 hours at $103.81 a barrel. Gold December futures opened Tuesday at $4,150.10 an ounce, down 0.4% from Monday's close and near a two-month low.

Crypto

As of 05:55 UTC on September 30, bitcoin traded at $83,358, down 0.4% from the 00:00 UTC open, in a range of $83,176 to $83,731. Ether was at $2,673, down 0.2%. XRP led the majors, up 0.8% to $1.502, and BNB rose 0.7% to $763.80. Solana and dogecoin were roughly flat.

On regulation, the CLARITY Act market-structure bill failed Senate cloture 49-50 on September 15. CFTC Chairman Selig has said the agency will draft its own market-structure rules for digital assets if the bill stalls.

What it means for crypto trading

The tape is quiet ahead of a data-heavy day. A firm PCE print would raise October hike odds and push yields higher, which is the main risk for crypto. A soft print would be the upside catalyst.

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