Core PCE rose again in February: time to sell semiconductor stocks?

S&P 500 is up another 1.0% on Friday after the U.S. Bureau of Economic Analysis said the core personal consumption expenditures price index climbed less than expected in February.

What does the reading mean for the Fed?

Versus the prior month, the Fed’s preferred inflation gauge was up 0.3% versus a 0.4% increase expected.

Much of the softness was related to a decline in energy prices. Reacting to today’s data, Jeffrey Roach – Chief Economist at LPL Financial said:

Headline PCE also climbed 0.3% for the month versus a much larger 0.6% increase expected. Year-to-date, the benchmark index is up about 7.0% at writing.

BofA analyst sees more upside in chip stocks

Also on Friday, a Bank of America analyst said there’s reason to believe that the semiconductor stocks are not out of room to run just yet.

“SOXX” – the iShares Semiconductor ETF is already up 30% for the year. Defending his view on CNBC’s “Squawk Box”, Vivek Arya noted:

He’s convinced that continued innovation particularly in artificial intelligence and electric/autonomous vehicles will keep the space strong moving forward. Chip stocks are a notable beneficiary of the Inflation Reduction Act as well.