Trader Robert Arciero, left, and specialist Michael Pistillo work on the floor of the New York Stock Exchange, Wednesday, Aug. 30, 2023.
The personal consumption expenditures (PCE) price index picked up to 3.3 percent from a year ago last month according to the Commerce Department, while spending edged up as well.
But the reading, coupled with other economic data this week showing some cooling in the economy, has not derailed hopes that the United States can achieve a "soft landing" where inflation comes down without triggering a recession.
About five minutes into trading, the Dow Jones Industrial Average rose 0.5 percent to 35,058.97.
The broad-based S&P 500 advanced 0.2 percent to 4,524.17, while the tech-heavy Nasdaq Composite Index also climbed 0.2 percent to 14,043.99.
"The key takeaway from the (PCE) report would have to be the uptick in the year-over-year inflation readings," said Patrick O'Hare of Briefing.com in a note.
"They weren't of the eye-popping variety," although they should also catch the Fed's eye as a basis not to cut rates anytime soon, O'Hare added.
Meanwhile, initial jobless claims fell last week according to a separate report, running at levels "that are indicative of a tight labor market that goes hand-in-hand with an economy that is definitely not in a hard-landing pattern," he said.
For now, this is expected to support some improvements in market movements.
Among individual companies, shares of software group Salesforce jumped 5.8 percent in early trading after reporting better earnings than expected.