A man shops for produce at a supermarket in Monterey Park, California on September 9, 2025.
Frederic J. Brown | Afp | Getty Images
A tamer-than-expected U.S. inflation report for September injected optimism into markets. Traders are now betting that the Federal Reserve will almost certainly cut rates at its October meeting — scheduled for later this week — as well as at its December gathering.
Major U.S. indexes climbed Friday and had their second consecutive week in the green, with the S&P 500, Nasdaq Composite and the Dow Jones Industrial Average all up about 2% for the week.
The inflation report offers additional support to markets already buoyed by a strong earnings season. Of the companies that have reported so far, 87% managed to exceed Wall Street’s expectations, much higher than the typical 67% beat rate, according to LSEG. If Big Tech earnings this week top estimates — and provide upbeat guidance — markets could see fresh highs.
U.S. President Donald Trump’s tariffs, however, are still a chilly overhang amid the warm sentiment. Trump on Saturday hit Canada with an additional 10% tariff, as punishment over an ad.
Economists have been warning that tariffs will lead to higher prices. Indeed, while the consumer price index report came in below estimates, September’s headline annual rate rose to 3% from the previous month’s 2.9%.
“Inflation might not be slowing but it’s not surprising to the upside anymore,” said David Russell, global head of market strategy at TradeStation.
With the lack of other data, such as the jobs report, because of the U.S. government shutdown, we don’t have the full picture of how the economy is performing — so the rise in markets could be balanced on a precarious ledge.
What you need to know today
Trade developments at the ASEAN Summit. Top U.S. and China officials met Sunday, resulting in “a very successful framework” for talks between Trump and Xi, according to U.S. Treasury Scott Bessent. Trump announced agreements with four Southeast Asian countries.
China’s industrial profits surge in September. They rose 21.6% from a year ago, helped by Beijing’s efforts to rein in a price war among manufacturers. The growth in profits was the largest since November 2023, and extends August’s increase of 20.4% year on year.
HSBC will recognize a $1.1 billion provision. The bank lost part of a court appeal linked to Bernard Madoff’s fraud scheme, but said it would pursue a second appeal. The $1.1 billion provision will be included in its third-quarter results, out Tuesday.
Stocks rise on CPI report. Major U.S. indexes climbed Friday, with the Dow Jones Industrial Average closing above 47,000 for the first time. U.S. stock futures rose Sunday evening stateside. Asia-Pacific markets advanced Monday, with Japan’s Nikkei 225 breaking the 50,000 level for the first time.
[PRO] Don’t overlook Asian equities, UBS says. While the U.S. stock market has been charging forward, investors should consider adding Asian stocks, bonds and gold to their portfolio for diversification, the Swiss bank said in a Friday note.
And finally…
U.S. President Donald Trump (left) and Chinese President Xi Jinping.
Jim Watson and Peter Klaunzer | Pool, AFP | Getty Images
Trump to meet China’s Xi for the first time in second term as trade deal remains elusive
White House press secretary Karoline Leavitt told reporters last week that Trump will meet his Chinese counterpart Xi Jinping on Oct. 30 on the sidelines of the Asia-Pacific Economic Cooperation, or APEC, Summit.
It will be the first in-person meeting between the two heads of states since Trump returned to the office in January. The high-stakes meeting comes as a delicate trade detente between the economic superpowers nears its expiration on Nov. 10, if they fail to agree on another extension.
— Anniek Bao
