Core PCE, income and spending, consumer sentiment: 3 things to watch

By Liz Moyer

Investing.com -- Stocks rose on Thursday as investors tried to get past fears about the banking sector and looked forward to the Federal Reserve's next move on interest rates.

One key data report the Fed will be looking at is tomorrow's inflation numbers for February. Analysts expect the growth in spending and consumption slowed in the period, which happened before the bank turmoil in March disrupted sentiment even more.

Futures traders are about evenly split on the Fed's next move. About half of them are betting on a rate hike of a quarter of a percentage point, while the other half believe the Fed will pause when it next meets in May.

By then, most of the S&P 500 will have run through first-quarter earnings reports, with investors listening to executives to see if their forecasts for the year have shifted any with the prospect of the Fed getting closer to the end of its rate hiking.

Here are three things that could affect markets tomorrow:

1. Core PCE

The Fed's preferred inflation reading is the personal consumption expenditure index, which is expected out at 8:30 ET tomorrow (12:30 GMT). Analysts expect the core PCE, which strips out energy and food prices, will rise 0.4% from the prior month and 4.7% for the year through February. 

2. Spending and income

Another batch of numbers focuses on spending and income, also due out at 8:30 ET. Personal income is expected to rise 0.2% for the month, and personal spending is expected to rise 0.3%. Both would be at a slower pace than the previous month.

3. Michigan sentiment

The latest University of Michigan consumer sentiment reading is due out at 10:00 ET. Analysts expect the March reading to be 63.2, a tiny dip from the prior reading.