Why August PCE Shouldn’t Be the Focus: 8 Key Items Shaping the Stock Market Wednesday

These are the early headlines and other items poised to influence the market at the start of trading Wednesday. As we share this collection of market drivers, U.S. equity futures point to a mixed market open.

1. The Bureau of Economic Analysis will release August’s personal consumption expenditures price index and its third estimate of second-quarter economic growth on Wednesday, Sept. 30, at 8:30 a.m. Eastern. The release will incorporate new data and revised methods for calculating several components of the PCE price index, potentially changing the reported inflation trend. Economists surveyed by FactSet expect the PCE price index to rise 0.4% month over month in August, up from 0.2% in July. Annual growth is expected to hold at 3.7%. The Fed targets 2% inflation as measured by the PCE price index. Core PCE inflation, which excludes food and energy, is expected to measure 0.3% on the month, translating to a 3.3% year-over-year gain in August. That would mark an acceleration from July’s 0.2% monthly gain, while leaving the annual rate unchanged. (Barron’s)

There will be quite a bit of attention on this morning’s August PCE Price Index report that will be published at 8:30 AM ET. As we get ready for that data, we’ll point out that the BEA is changing how it calculates PCE inflation for portfolio management, computer software and accessories, and legal services components. Of the three categories, analysts and economists appear most uncertain about the effect of the portfolio-management deflator.

Economists expect the revisions to reduce annual headline and core inflation by around 0.2 percentage points. What this means is we will want to compare recent PCE figures with any restatements found in today’s release. It also means that we should understand that these updates should be viewed as revisions, not an indication that inflation pressures were demonstratively softer than previously reported.

But we will also say that in our view, the August data is rather backward facing at this point and as we’ll discuss in out next item, we’re focusing more on inflation data that will be reported later this week, next week and mid-October. Keep reading for why that is…

2. Mediators are making a renewed push to advance a deal between the US and Iran, days after President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz and restart talks on ending the war. (FT) Oil prices rose on Wednesday and were on track for a big monthly ‌gain as US-Iran talks aimed at ending their war stalled and tight fuel markets continued to underpin prices despite recovering Middle East crude supplies… US President Donald Trump denied reports by Axios and CNN that cited US officials as saying he was willing to give Iran sanctions relief and release frozen Iranian funds in return for “concrete” steps by Tehran on its nuclear programme. (Reuters)

As we get ready to close the books on September, oil prices are headed toward a monthly increase near 14%, a figure that will reverberate through September economic data. Already, the Cleveland Fed’s Inflation Nowcasting model sees headline September CPI as well as headline PCE and core PCE for the month rising on a year-over-year basis compared to August figures.

That is one of the reasons why we are focused on what the upcoming Prices sub-index for the September Manufacturing PMI and Services data from ISM has to say about inflation as well as margin pressures. Those figures as well, as the analogue comments from S&P Global in their Final September PMI reports will help shape expectations for upcoming September CPI and PPI data as well as October monetary policy expectations.

3. Boeing has been selected to build the US Navy’s next-generation stealth fighter, the Pentagon said on Tuesday, marking the company’s second consecutive major win on fighter jets and capping months of delay over a program central to US strategy for ‌countering China in the Pacific. Boeing beat out rival Northrop Grumman Corp for the development contract, worth $20 billion, to produce test aircraft. The program could grow to hundreds of billions over its lifetime as production ramps up and, potentially, as international customers place orders. (Reuters)

After recent developments on the 737 MAX 10 software front, this is a nice vote of confidence and a testament for the longer-term prospects for Boeing’s (BA) arguably overlooked Defense, Space & Security (BDS) segment. In addition to beating out Northrop Grumman (NOC), in March 2025, Boeing bested Lockheed Martin (LMT) for the Air Force’s F-47. Those wins mean Boeing will now be the dominant maker of the sixth-generation American fighter aircraft.

The Navy win is lifting BA shares in premarket trading, and we are inclined to use the cumulative drop since early August to improve our cost basis in the shares.

4. Apple Inc. is set to sell about 6 million units of the iPhone Duo this year, Counterpoint Research said, offering the first estimate for how the company’s inaugural foldable device will fare. The figure, more typical of the niche foldable segment than Apple’s usual smartphone sales, is contingent on how well the company ramps up production of the new hardware… IDC estimates foldables will grow 13% to 22.9 million units shipped this year with Apple’s help. Without the iPhone Duo, the segment would have seen a decline… (Bloomberg)

For context, in 2025, Apple (AAPL) sold ~247 million iPhones, but let’s keep in mind that Counterpoint Research’s 6 million figure is for “this year” meaning that figure is for the 69 days the Duo will be available this year. That means the better measure is the ~82 million iPhones Apple shipped in calendar Q4 2025.

Here’s the thing, the Duo has the potential to be the next status symbol product. We’ll have a better indication of that status when pre-orders begin on October 12 and the device lands on shelves 23… assuming we can get our hands on one.

5. Hormel Foods Corporation, a Fortune 500 global branded food company, today announced it has entered into a definitive agreement to acquire Brakebush Brothers, LLC, a leading value-added chicken company, from the Brakebush family. The purchase price is approximately $1.055 billion, and the transaction is expected to close during the first quarter of Hormel Foods’ fiscal 2027, subject to customary closing conditions, including regulatory approval. (PR Newswire)

The acquisition advances Hormel’s (HRL) strategy of investing in protein categories to reposition its product portfolio to better match evolving consumer preferences. Th move is a reminder that even though headlines are currently focusing on a slower IPO market, companies continue to evaluate moves to fill in product, technology, geographic and other gaps through M&A activity.

6. Micron Technology is heading toward its fiscal fourth-quarter results on Sept. 30, with Wall Street looking for another huge jump in sales and earnings as AI spending keeps boosting memory demand. The company expects quarterly revenue of $50 billion, plus or minus $1 billion, and adjusted earnings of $31 per share, plus or minus $1. Its guidance also calls for an adjusted gross margin of about 86%…. Wall Street is setting the bar slightly higher. Recent consensus estimates call for roughly $50.8 billion in revenue and adjusted EPS of about $31.5. That would represent another quarter of rapid year-over-year growth. The biggest question may be what comes after this quarter. Analysts are watching HBM demand, memory pricing and Micron’s outlook for fiscal 2027. (Yahoo! Finance)

When EPS All-Stars holding Micron (MU) reports after today’s market close, what the management shares about AI and data center demand for its products, the pricing environment, and when it sees capacity levels more in line with demand will be some of the key items we and Wall Street are following. Given our position in Applied Materials (AMAT), we’ll also be interested in comments around capital spending for this year and any initial ones for 2027.

In line with that, we are reading this morning that Taiwan Semiconductor (TSM) is evaluating a potential investment in Texas to expand chip production in the U.S.. Word is that potential investment would be in addition to the $265 billion TSMC has already committed to Arizona.

7. Economic data today per TipRanks: MBA Mortgage Application Index (Weekly), ADP Employment Change Report (September), PCE Price index (August), Personal Income & Spending (August), Final GDP (Q 2 2026), Final Corporate Profits (Q2 2026), Chicago PMI (September), EIA Crude Oil Stocks (Weekly).

8. Companies reporting today per TipRanks: AM – Cal-Maine Foods (CALM), ConAgra (CAG), FactSet (FDS), Jabil (JBL). PM – Micron (MU), Progress Software (PRGS).

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMAT, and BA.