Cooler-than-expected U.S. consumer inflation adds to market cheer
People shop for groceries at a supermarket in Monterey Park, California, on September 9, 2025.
Frederic J. Brown | Afp | Getty Images
The US inflation report, which was softer than expected for September, injected optimism into the markets. Now traders bet It is almost certain that the Fed will cut interest rates at its October meeting and December meeting, which are planned to be held later this week.
Major US indices rose on Friday and were in the green for a second straight week. S&P 500, Nasdaq Composite And Dow Jones Industrial Average all were up about 2% for the week.
The inflation report offers additional support to markets already buoyed by a strong earnings season. According to LSEG, 87% of companies reporting so far have managed to beat Wall Street’s expectations; this is much higher than the typical 67% defeat rate. If Big Tech’s earnings this week top estimates and provide optimistic guidance, markets could hit new highs.
But US President Donald Trump’s tariffs remain cold amid the hot weather. Trump was set to impose an additional 10 percent tariff on Canada as a punishment for an ad on Saturday.
Economists warn that tariffs will lead to higher prices. Indeed, although the consumer price index report came in below forecasts, September’s headline annual rate rose to 3% from 2.9% the previous month.
“Inflation may not be slowing down, but the upward movement is no longer surprising,” he said David Russell is TradeStation’s head of global market strategy.
We don’t have a complete picture of how the economy is performing due to the lack of other data, such as the jobs report, due to the U.S. government shutdown; hence the rise in markets may balance on an unstable cliff.
What you need to know today
Trump will impose an extra 10 percent tariff on Canada. This brings General taxes in Canada increased to 45%. Ontario says it will stop a Ronald Reagan ad criticizing tariffs that angered Trump after the first two games of the World Series.
Trade developments at the ASEAN Summit. Senior US and Chinese officials met on Sunday, resulting in a “very successful framework” for talks between Trump and Xi, according to US Treasury Secretary Scott Bessent. Trump announced agreements with four Southeast Asian countries.
US inflation rose less than expected. The consumer price index for September stood at 0.3% for the month and the annual rate was 3%. Both figures were 0.1 point lower than the 0.4% and 3.1%, respectively, expected by a survey of Dow Jones economists.
Stocks are on the rise with the CPI report. Major indexes rose on Friday as the Dow Jones Industrial Average closed above 47,000 for the first time. Pan-European Stoxx 600 It reversed previous losses, rising 0.23%. US stock futures rose in the US on Sunday evening.
[PRO] A week ahead full of earnings and meetings. Five of the Magnificent Seven stock group this week – except for all of them Tesla’s And Nvidia – they will announce their financial results, the US Federal Reserve will meet and the Trump-Xi meeting can finally take place.
And finally…
US President Donald Trump (left) and Chinese President Xi Jinping.
Jim Watson and Peter Klaunzer | Pool, AFP | Getty Images
White House press secretary Karoline Leavitt he told reporters Last week, Trump will meet with his Chinese counterpart Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit on October 30.
This will be the first face-to-face meeting between the two heads of state since Trump returned to office in January. The high-stakes meeting comes as the sensitive trade deal between the economic superpowers approaches its Nov. 10 expiration unless another extension is agreed.
— Anniek Bao
