Indices fall after inflation is hotter than expected

• Indexes fell on Thursday as investors factored in hotter-than-expected inflation data.

• Meanwhile, jobless claims rose by 33,000 to 258,000, the highest level in more than a year.

• Traders see the latest data strengthening the odds of a 25 basis point rate cut next month.

U.S. stocks fell on Thursday as investors took in slightly hotter-than-expected inflation data after last week’s strong jobs report.

The Consumer Price Index showed prices rose 2.4 percent year-on-year in September, which was slightly above consensus forecasts for a 2.3 percent rise.

The core CPI reading, which excludes food and energy costs, was 3.3% year-on-year, slightly above forecasts of 3.2% and 0.3% higher than August’s reading.

Analysts are now changing their expectations for further easing from the Federal Reserve as inflation cools a bit more slowly than expected and last week’s successful jobs report showed a red-hot economy with 254,000 jobs added last month .

The jobs report dashed hopes of another jumbo 50 basis point cut, but the slight surprise in the CPI rise likely isn’t enough to prompt a complete pause in Fed easing.

“There is only one set of inflation reports between now and then, and even a firm upside surprise could be discounted as normal monthly volatility on the way back to the 2% target,” JPMorgan analysts said in a note on Friday after the jobs report. .

Investors now see a 25 basis point rate cut at next month’s central bank meeting more likely than leaving rates unchanged, according to CME FedWatch tool.

Meanwhile, weekly jobless claims rose 33,000 to 258,000, according to Labor Department data released Thursday.

That beat forecasts of 230,000 and marks the data point’s highest level in over a year.

Here’s where U.S. indexes stood shortly after the opening bell at 9:30 a.m. Thursday:

Here’s what else happened on Thursday:

• FEMA didn’t need the money even before Hurricanes Helene and Milton hit the South.

• JPMorgan’s top strategist, one of Wall Street’s biggest bears, is bullish on the stock market for the first time in two years.

• Billionaire investor Bill Gross recommends defensive and high-yield stocks as the market’s record run is set to slow.

In commodities, bonds and crypto:

• Oil futures rose. West Texas Intermediate crude rose 1.3 percent to $74.23 a barrel. Brent crude, the international benchmark, rose 1.34% to $77.62 a barrel.

• Gold rose 0.36% to $2,635.6 an ounce.

• The 10-year Treasury yield was almost flat at 4.08%.

• Bitcoin dropped as low as $63,126.50.

Read the original article on Business Insider