After yesterday's surprising Producer Price Index, some investors and economists had hoped that today's consumer inflation showing would follow wholesale inflation to the downside.
They didn't get their wish.
The Consumer Price Index advanced 0.4% in August, rising 2.9% year-over-year, faster than expected. Energy prices (+0.7% month-over-month), food (+0.5%), and shelter (+0.4%) were the leading culprits. If you exclude these volatile figures and look just at the core CPI, you get what analysts were looking for: a 0.3% advance to 3.1% YoY.
Still, investors have litte doubt that a Federal Reserve interest rate cut is still a lock. It just might not be the 0.5 percentage point cut that some investors were looking for.
Thursday Reading
After the print, the odds of three cuts by year-end were seen as a certainty, driven by fears about the job market. Initial unemployment claims came in at the highest rate in nearly four years, at 263,000. The four-week average rose.
That's all to say, stocks continued soldiering upward. The Dow (+1.28%), S&P 500 (+0.80%), and Nasdaq Composite (+0.68%) just notched fresh intraday highs. Gains have accelerated in light of weaker economic data and rising rate-cut odds. The indexes could be on track to set record closes. And the Russell 2000 (+1.43%) looked poised to set its first record of 2025.
TurboTax Via TheStreet
-- Noah Weidner, markets reporter
