September Inflation Data Supports Stock Market Rise

Investors Evaluate September Inflation Report

U.S. stock markets gained value on Friday morning as investors digested a critical inflation report, curious about the impact on upcoming policies from the Federal Reserve. The Dow Jones Industrial Average (%DJI) rose by 0.5%, the S&P 500 (%GSPC) increased by 0.7%, and the Nasdaq Composite (%IXIC) witnessed a 0.9% rise.

Investors focused their attention on the inflation data for September, which was delayed by more than a week due to the ongoing government shutdown. The Consumer Price Index (CPI) report showed an annual increase of 3%, reaching its highest level since May, but fell short of expectations of a 3.1% rise, yielding a softer result. The monthly increase of 0.3% was slightly below August's reading.

According to the report, following the government shutdown, investors obtained a long-awaited pulse check on the economy after the release of the first major economic data.

The CPI data did not significantly shake investor confidence in the Federal Reserve's nearly certain rate cut expectations for next week; there is a 99% bet indicating a quarter-point cut next week, with 96% anticipating another cut in December.

Meanwhile, President Donald Trump added new uncertainties to ongoing trade negotiations with key U.S. trading partners, announcing on Friday that he would cancel trade talks with Canada. Trump stated that Canada had used a commercial featuring the voice of former President Ronald Reagan against his own signature tariff plan.

Despite another volatile week on Wall Street, the markets continue to head towards weekly gains.

On the corporate front, shares of Intel (%INTC) rose nearly 6% in Friday morning trading. The chip giant’s third-quarter earnings report exceeded Wall Street estimates, boosting optimism.

Intel Investor Relations Chief John Pitzer stated in an interview, “We believe we are well-positioned to play a more significant role in the Artificial Intelligence sector.”

Data from the Bureau of Labor Statistics indicated that on Friday, the prices of goods and services came in lower than expected.

Additionally, shares of Procter & Gamble (%PG) rose by 3% ahead of Friday, as the company reported results that surpassed first-quarter estimates.

Here are some key news items you may have missed this morning:

Economic Data: Consumer Price Index (September); S&P Global U.S. Manufacturing PMI (October); S&P Global U.S. Services PMI (October preview); S&P Global U.S. Composite PMI (October preview); New Home Sales (September); University of Michigan Consumer Sentiment (October final reading); Kansas City Fed Services Activity (October).

Earnings Calendar: Procter & Gamble (%PG), Sanofi (%SNY), HCA Healthcare (%HCA), General Dynamics (%GD), Illinois Tool Works (%ITW), NatWest Group (%NWG), Eni (%E), Booz Allen Hamilton (%BAH).

Highlights: Trump halts Canada trade talks due to Reagan tariff ad; CPI inflation prepares to quench investors’ thirst for data; the markets have 'bubbles,' but the stock market still holds; investors are using the dotcom era handbook to avoid AI bubble risks; JPMorgan will start accepting Bitcoin and Ethereum as collateral under its crypto initiative; the next phase of the S&P 500 rally is supported by large buyers waiting on the sidelines; effects of record national debt on mortgage rates; Procter & Gamble exceeded forecasts with robust demand; disruptive effects of oil are widening, China halts some Russian purchases due to restrictions.

In conclusion, today’s excesses have not stalled the current rally unlike past boom-bust cycles.