4:15pm: Dow, S&P end at record highs
Wall Street ended on a hot streak ahead of tomorrow's release of fresh CPI data.
As a reminder, Bank of America projects core PCE inflation at 0.18% for September, keeping it near the Fed’s 2% target.
At 4pm, the Dow Jones had gained over 1% on the day to end at a new record of 42,512 points.
Same went for the S&P 500, which finished at a record high of 5,792, up 0.7%.
And the Nasdaq had a good day, ending around 18,292 for a 0.2% increase on the day
3:30pm: Milton's economic impact
Hurricane Milton is expected to have a significant economic impact, directly affecting about 3% of the US economy, according to Ryan Sweet, chief US economist at Oxford Economics.
The storm could shave more than a tenth of a percentage point off fourth-quarter GDP, Sweet estimates. Sectors such as tourism, housing, and oil supply are anticipated to suffer, with canceled trips to Disney World and lagging home sales being just a few examples of potential disruptions.
In addition to the GDP hit, job creation may also be affected. Hurricane Helene, which struck the Southeast two weeks earlier, could reduce the October US jobs report by 50,000 jobs. CNN reported that Sweet warns Milton could have an even more pronounced impact on employment.
Meanwhile, in Washington, President Joe Biden emphasized the potential severity of Hurricane Milton, calling it a "storm of the century" and urging Florida residents to heed evacuation orders.
“It’s looking like the storm of the century,” Biden said from the White House on Wednesday.
“Many communities in Hurricane Milton’s path do not have a moment to catch their breath between Helene and Milton, two historic storms in two weeks,” he said.
2:35pm: Fed minutes indicate optimism about inflation
Minutes from the Fed's September meeting revealed that a "substantial majority" of officials backed a half-point interest rate cut, while "some participants" favored a smaller 25 basis point reduction.
The minutes underscored the need for flexibility in monetary policy, adjusting based on incoming data rather than a set plan, according to Quasar Elizundia, Expert Research Strategist at Pepperstone.
Minutes from the latest Fed meeting indicates that the governing body remains optimistic about inflation moving toward its 2% target, Elizundia noted.
While the Fed has eased its restrictive stance, future moves will depend on both inflation and labor market trends. Additionally, concerns were raised about global economic risks and their potential impact on the U.S., prompting a cautious, gradual approach to policy adjustments.
2:00pm: What's ahead for CPI?
With the latest CPI readout due on Thursday, here's what analysts are expecting.
Bank of America projects core PCE inflation at 0.18% for September, keeping it near the Fed’s 2% target. This could support market expectations for a 25-basis-point rate cut in November, unless PCE inflation rises sharply.
"While knee-jerk the market may initially bear flatten with a MoM core 0.3% CPI print, we think it may be short lived," analysts wrote. "The pass-through implications for PCE and Fed path should be limited."
A disinflationary CPI report may encourage US Treasury buying, especially in shorter maturities, although market skepticism remains due to election risks and uncertainty about the economy’s trajectory.
1:00pm: Clock ticking for CPI read
Stock markets continue to drift higher as investors anticipate tomorrow's U.S. inflation data, while oil prices have taken another dive, according to Chris Beauchamp, Chief Market Analyst at online trading platform IG.
"The clock is ticking down to tomorrow’s US inflation reading; a higher reading tomorrow would give the chances of a hold next month quite a boost, lifting the dollar too," Beauchamp noted.
"Notably tech stocks have avoided too much of a dramatic reaction to news of a possible anti-trust move on Alphabet, even if the search engine titan itself is down over 1%".
11:40am: Stocks riding high
Stocks were up on Wednesday morning, building on significant gains from the previous session as investors anticipate important economic data and upcoming earnings reports.
The S&P 500 climbed 0.5% after reaching a new record high, while the Dow Jones Industrial Average increased by 0.7%, and the Nasdaq Composite added 0.5% just before the midway point of trading.
11:10am: Boeing, TSMC among early movers
A couple movers of note in the morning.
Boeing's share price ended lower after the company announced it had withdrawn its pay rise offer to striking workers, citing a breakdown in negotiations with the International Association of Machinists and Aerospace Workers (IAM) union.
The plane maker accused the union of failing to seriously consider its final offer, which included a 30% pay rise over four years, compared to the 40% demanded by the union.
IAM responded by stating that Boeing was unwilling to negotiate. More than 30,000 workers went on strike last month after rejecting a previous deal offering a 25% increase.
Elsewhere, Taiwan Semiconductor Manufacturing Co (ADR) (Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM)), the world’s preeminent chip manufacturer, reported a strong year-on-year performance for September.
The manufacturing partner of Nvidia, Apple and Meta recorded revenue of 251.87 billion new Taiwan dollars (£6 billion), marking a 39.6% increase from September 2023.
For the first nine months of 2024, TSMC's total revenue exceeded NT$2 trillion (£47.5 billion), representing a 31.9% growth compared to the same period in 2023.
9.44am: Dow Jones higher in mixed start on Wall Street
Wall Street got off to a mixed start on Wednesday, as investors braced for inflation data and the start of third-quarter earnings season later in the week.
The Dow Jones and S&P 500 opened just above the mark, while the Nasdaq slipped into negative territory.
Investors also awaited Federal Open Market Committee minutes on Wednesday, with these due to be released later in the day.
Following a rapid scaling back of expectations for further steep interest rate cuts by the Federal Reserve ahead, these were due to shed light on the scope for reductions ahead of the release of inflation data on Thursday.
7.58am: Wall Street seen in cautious mood
Wall Street looked set for a cautious start on Wednesday after Tuesday saw stocks enjoy gains after a sell-off earlier in the week.
Futures had the Nasdaq falling 0.2% on the opening bell, while the Dow Jones and S&P 500 were seen 0.1% lower respectively.
This would follow gains across the board on Tuesday as markets recovered from Monday’s sell-off, which was prompted by a jump in Treasury yields on falling expectations for steep rate cuts by the Federal Reserve ahead.
A quiet day of scheduled news on Wednesday saw attention turn to Thursday’s inflation reading as a result, which is set to provide further clarity around the scope for future cuts.
“Federal Open Market Committee minutes that are due later today and, crucially, tomorrow’s CPI report for September, will be the most important drivers of rate cut expectations in the short term,” XTB analyst Kathleen Brooks commented.
Wednesday also looked to be a quiet period ahead of the start of third-quarter earnings season later in the week, with Delta Air Lines Inc (NYSE:DAL) reporting on Thursday, before BlackRock Inc (NYSE:BLK), JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) and Wells Fargo & Co (NYSE:WFC, ETR:NWT) on Friday.