Trading Catalysts: PCE print could test FOMO-driven market

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Trading Catalysts: PCE print could test FOMO-driven market

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Trading Catalysts

PCE print could test FOMO-driven market

PCE print could test FOMO-driven market 26 May 2026

This week’s PCE print (Thu) is a potential catalyst given persistent inflation concerns. So Equity and Quant Strategy

far, markets have largely looked through recent hot prints, the energy shock, and United States

resilient US data (see Global note). Our derivatives team highlights that US equities Paula Andrea Soto, CFA >>

remain supported by FOMO dynamics, while our strategists see continued strength in LatAm Equity Strategist

earnings (see higher EPS forecasts) but remain neutral-to-negative on the index amid Merrill+55 11Lynch2188 (Brazil)4226

elevated valuations and macro risks. Meanwhile, markets assess whether a US–Iran deal Thomas (T.J.) Thornton

may be nearing (see What to do the day the Strait reopens). The BofA desk has several Head of Research Marketing

baskets related to this week's catalysts, including PCE, AI/Semis, and Iran de-escalation / BofAS+1 646 855 2449

escalation (see Exhibit 2). Economics

Stephen Juneau

US Economics: PCE to shape the bar for Fed hikes USBofASEconomist

This week, the main focus is the April personal income and outlays report, including PCE Equity & Quant Strategy

inflation (Thursday). Our economics team expects headline PCE to rise 0.4% m/m (3.8% Savita Subramanian

y/y), while core PCE is projected to increase 0.3% m/m (3.3% y/y), as inflation continues EquityBofAS & Quant Strategist

to run above the Fed’s 2% target. For the Fed to resume hikes under Warsh, core PCE Derivatives Strategy

would likely need to reaccelerate (to around 3.5% or higher), alongside a decline in the u- Nitin Saksena

rate to 4.0% or below.