U.S. stocks fell on Thursday after the latest consumer inflation data was higher than expected, raising expectations for the path of interest rates.
The Dow Jones Industrial Average (^DJI) was down about 0.2%, and the S&P 500 (^GSPC) was down about 0.3%, but both hit new all-time highs. The Nasdaq Composite Index (^IXIC), which has a high proportion of tech stocks, also fell by 0.5%.
U.S. government data showed consumer prices rose 0.2% last month, beating the 0.1% rise that Wall Street had expected. On an annualized basis, prices rose 2.4% versus the expected 2.3%. The index was more closely watched than in previous years as investors fret about the possibility of an economic “failure” after last week’s jobs report reignited fears of a resurgence in inflation. .
But the job market delivered a surprise of its own on Thursday, with new jobless claims rising to 258,000, far higher than Wall Street expected and the highest since June 2023.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
Despite many variables, traders currently believe there is a 15% chance the Fed will keep interest rates unchanged in November, according to the CME FedWatch tool. Just a week ago, there was a 0% chance of no rate cut, as markets heeded policymakers’ messages and braced for a 25 basis point cut.
Also on deck will be Tesla’s (TSLA) highly anticipated robotaxi event on Thursday night. CEO Elon Musk is expected to unveil a prototype of the CyberCab two-door butterfly wing on which the EV maker’s future is staked.
Earnings season started gaining momentum before the bell with quarterly results from Domino’s Pizza (DPZ) and Delta Air Lines (DAL). Although the pizza chain posted higher profits, sales fell short, and the airline’s profits fell more than 25% year-on-year due to global technology glitches. Stock prices fell slightly.
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Thursday, October 10, 2024 7:16 a.m. PDT
Gas prices and energy index plummet, but not enough to offset rising CPI
The drop in gas prices was not enough to offset the rise in food and housing prices in September, contributing to higher-than-expected inflation.
The gasoline index fell 4.1% last month, compared with a 0.6% drop the previous month, according to data released Thursday by the Bureau of Labor Statistics.
On an annualized basis, gasoline prices fell by 15.3% and the overall energy index fell by 6.8%.
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Thursday, October 10, 2024 6:30 a.m. (Pacific Daylight Time)
Tech stocks fall as consumer prices rise more than expected in September
Major stock averages opened lower on Thursday after the monthly consumer price index (CPI) was higher than expected. This raised expectations that the Federal Reserve would opt for a modest rate cut at next month’s meeting.
The Dow Jones Industrial Average futures (^DJI) fell about 0.2% and the S&P 500 (^GSPC) fell about 0.3%, down from its all-time high close. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, also fell by 0.5%.
Technology stocks (XLK) led the decline, followed by consumer staples (XLY). On the other hand, energy stocks (XLE) rose on Thursday morning’s rise in oil prices.
Investors are betting the Fed’s next rate cut will be 25 basis points instead of 50 after inflation rose 0.2% in September, faster than the 0.1% rise Wall Street had expected, according to the latest government data. It is possible that you are predicting that.
Thursday, October 10, 2024, 5:55 a.m. (Pacific Daylight Time)
Delta Air Lines stock falls due to poor profits, CEO blames CrowdStrike
Delta Air Lines (DAL) reported third-quarter results Thursday morning that fell short of Wall Street expectations, Yahoo Finance’s Brad Smith reports. The failure sent the company’s stock price down as much as 7% in pre-market trading before offsetting losses.
Let’s take a look at its performance compared to analyst expectations compiled by Bloomberg.
Adjusted net income: $971 million vs. $981 million expected
Adjusted earnings per share: $1.50 vs. $1.52 expected
Revenue: $14.59 billion vs. $14.68 billion expected
Delta Air Lines expects fourth-quarter earnings per share of $1.60 to $1.85, with a median of $0.73 and Wall Street analysts expecting $0.78, according to Bloomberg data. He said it was slightly below.
Delta Air Lines CEO Ed Bastian blamed the disruption caused by the widespread CrowdStrike failure in mid-July. He said an issue with the CrowdStrike cybersecurity software used by Delta Air Lines forced the airline to cancel thousands of flights and wiped $380 million from its revenue for the quarter.
“We had 86 great days, but there were five days that were impacted by CrowdStrike,” Bastian told Yahoo Finance.
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Thursday, October 10, 2024 5:42 PDT
The number of unemployment insurance applications unexpectedly surges to the highest level since August 2023
Weekly jobless claims rose more than expected last week, the latest sign that while the labor market is showing signs of strength, there are still signs of cooling. Ta.
New data from the Labor Department showed 258,000 new jobless claims were filed in the week ending Oct. 5, up from 225,000 the week before and above economists’ expectations of 230,000. This is the highest weekly unemployment claims since August 2023.
Meanwhile, the number of continued applications for unemployment benefits reached 1.86 million, an increase of 42,000 from the previous week.
Thursday, October 10, 2024 5:32 a.m. PDT
Prices rose more than expected in September
A closely watched report on U.S. inflation showed consumer prices rose more than expected in September, according to the latest data from the Bureau of Labor Statistics released Thursday morning.
The consumer price index (CPI) rose 2.4% year-on-year in September, accelerating compared to August’s annual price increase of 2.5%. The annual growth rate exceeded economists’ expectations of 2.3%.
The index rose 0.2% from the previous month, beating Wall Street’s expectations for a 0.1% rise.
On a “core” basis, excluding volatile food and gas prices, prices in September rose 0.3% from the previous month and 2.4% from a year earlier. Core prices in August rose 0.3% from the previous month, and rose 3.2% on an annualized basis. Both the monthly and annual core measures were higher than economists expected.
