"Cooling Inflation Gauge Sparks Optimism for Stocks"

The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index minus food and energy, is expected to show a modest increase of 0.2% in April, indicating some relief from persistent price pressures. This data supports the Fed's cautious approach to interest rate cuts, as officials seek more evidence of sustained progress towards their 2% inflation target. The overall PCE price index is projected to rise 0.3% for the third consecutive month, highlighting the uneven progress in the Fed's inflation battle.