Wall Street climbs after report shows prices rose less than feared, boosting chances for a rate cut – Chicago Tribune
Wall Street markets rose early Friday after long-awaited government data showed inflation remained high but prices rose less than expected last month. The report reinforces expectations that the Federal Reserve will propose another interest rate cut when central bank officials meet next week.
S&P 500 futures rose 0.7% while Dow Jones Industrial Average futures rose 0.5%.
The 10-year Treasury yield immediately fell after the inflation report, falling from 4.01% to 3.97%.
Friday’s inflation report – released more than a week late – showed that the costs of some imported goods rose while rental prices fell.
Consumer prices increased by 3% in September year-on-year, compared to 2.9% in August. Excluding the volatile food and energy categories, core prices also rose 3%, down from 3.1% in the previous month. Both numbers are above the Federal Reserve’s 2% target.
The Consumer Price Index report is being released more than a week late due to the government shutdown, now in its fourth week. The Trump administration recalled some Labor Department employees to produce these numbers because they are used to set the annual cost-of-living adjustment for about 70 million Social Security recipients.
The figures reflect a smaller increase than many economists expected and will likely encourage the Federal Reserve to cut its key interest rate when it meets next week for the second time this year.
Oil prices rose following Thursday’s 5% rise after the United States and Europe imposed more sanctions on Russian oil.
Early Friday, U.S. benchmark crude gained 17 cents to $61.96 a barrel, while Brent crude rose 25 cents to $66.24 a barrel.
Intel climbed 6.8% after beating Wall Street profit forecasts for the third quarter. This is Intel’s first earnings report since President Trump announced the U.S. government was taking a 10% stake in the struggling chipmaker. The company has cut jobs and delayed major projects in an effort to shore up its finances and better compete with rivals who have since overtaken it.
Shares of Ford Motor Co. jumped 4.4% after the automaker easily beat Wall Street’s sales and profit targets. Revenue increased 9% from the same period last year, reaching a record $50.5 billion.
Gold, which has been at record highs for most of the year, fell 1.7% on Friday to $4,075.10 an ounce.
At midday in Europe, Germany’s DAX rose 0.1%, while Britain’s FTSE 100 edged up less than 0.1%. In Paris, the CAC 40 fell by 0.3%.
Chinese benchmarks rose after the ruling Communist Party concluded a major planning meeting on Thursday without any major policy changes.
Hong Kong’s Hang Seng Index gained more than 0.7% to 26,160.15, while the Shanghai Composite Index gained 0.7% to 3,950.31.
Japan’s Nikkei 225 rebounded on Friday from the previous day’s losses, adding 1.4% to 49,299.65. Technology stocks were among the winners, as sentiment was boosted by the White House’s confirmation of the Trump-Xi meeting.
Data released Friday showed Japan’s core inflation rate rose to 2.9% in September from 2.7% in August. Despite price pressures, the Bank of Japan is largely expected to keep interest rates unchanged at its meeting next week: newly elected Prime Minister Sanae Takaichi has expressed his preference for keeping rates low.
In Seoul, the Kospi index jumped 2.5% to 3,941.59, a new record, as gains on Wall Street and the announcement of the Trump-Xi summit lifted investor confidence and eased trade concerns.
Australia’s S&P/ASX 200 index slipped almost 0.2% to 9,019.00 after preliminary data showed Australian factory activity contracted to 49.7 in October from 51.4 in September.
India’s BSE Sensex index fell more than 0.5%, while Taiwan’s stock market was closed for a public holiday.
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