Soft CPI data powers Wall Street to a record high as S&P 500 hits 6,800 for the first time

[US Markets Open After President Trump Announces EU Tariff Extension]
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Wall Street on Friday soared after market participants, starved of economic data during the ongoing U.S. government shutdown, received a reprieve in the form of a cooler-than-expected consumer inflation report.

All three major averages scaled new intraday all-time peaks, with the benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) surpassing the 6,800 points level for the first time ever. The gauge was last +1% in afternoon trade. Meanwhile, the blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) was +1.1%, while the tech-heavy Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) was +1.3%.

Before the opening bell, data from the U.S. Bureau of Labor Statistics showed [https://seekingalpha.com/news/4508175-consumer-price-index-shows-slightly-cooler-than-expected-inflation-in-september] headline CPI coming in at +0.3% M/M, versus an expected figure of +0.4%. Core CPI for September was +0.2% M/M, versus a consensus of +0.3%. On a Y/Y basis, core CPI was +3.0%, still well above the Federal Reserve's 2% target.

The CPI print reinforced [https://seekingalpha.com/news/4508191-soft-retail-inflation-data-supports-feds-easing-cycle#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] expectations that the Fed would deliver another 25 basis point interest rate cut at its monetary policy committee meeting next week. Meanwhile, the data could be the last inflation indicator for a while, as the White House said the October CPI report likely won't be [https://seekingalpha.com/news/4508205-october-cpi-likely-wont-be-released-next-month-white-house-says#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] released.

"Today’s CPI is consistent with a +0.2% MoM reading in the more important core PCE deflator (which will be delayed). That would make the third such tame reading in a row and the fifth in the past six months. The light is getting greener for the Fed to cut next week and keep on going until the 3% neutral Fed funds estimate, at the very least," David Rosenberg, founder and president of Rosenberg Research & Associates, said on X (formerly Twitter).

Diane Swonk, chief economist at KPMG US, cautioned that staffing shortages ahead of the government shutdown could be undermining the real-time value of the CPI data.

"The White House has warned that we may not get inflation data for October, given the shutdown. Some data is easier than other data to backfill. Inflation is not one of them," Swonk added.

Turning to the fixed-income markets, U.S. Treasury yields were largely lower across the board. They had initially slid [https://seekingalpha.com/news/4508196-treasury-yields-sink-as-bonds-rally-after-soft-september-consumer-inflation-report] as investors had snapped up bonds after the CPI report. The benchmark 10-year yield (US10Y [https://seekingalpha.com/symbol/US10Y]) was last down 1 basis point to 4.00%, while the shorter-end, more rate-sensitive 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) was also down 1 basis point to 3.49%.

For more, see how Treasury yields have done across the curve [https://seekingalpha.com/etfs-and-funds/etf-tables/bonds] on the Seeking Alpha bond page.

Looking at the earnings season, shares of Procter & Gamble (PG) were +1.3% after the consumer brands giant topped [https://seekingalpha.com/news/4508147-procter-gamble-tops-organic-sales-estimates-on-strong-demand-for-beauty-products] quarterly organic sales estimates.

Ford (F) stock was the top S&P 500 percentage gainer, up +11.7%. The legacy carmaker comfortably beat quarterly revenue expectations, though it warned [https://seekingalpha.com/news/4508198-while-novelis-fire-and-tariffs-cloud-outlook-ford-continues-to-fire-on-all-cylinders] of an up to $2B hit from a fire at a supplier plant.

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