4:20pm: Fed rate outlook uncertain
Stocks closed lower on Thursday following a hotter-than-expected consumer inflation report, raising uncertainty over the Federal Reserve's upcoming interest rate decision in November.
The Dow Jones Industrial Average dropped by around 0.1%, the S&P 500 slipped 0.2%, and the Nasdaq Composite dipped less than 0.1%.
However, Nvidia and Amazon both gained over 1%, helping the Nasdaq limit its earlier losses.
3:15pm: Tesla to hold hotly anticipated Robotaxi event
Tesla's long-awaited Robotaxi launch is set to mark a pivotal moment for the company, with CEO Elon Musk positioning the event as a transformational step in autonomous driving.
According to Wedbush analyst Dan Ives, the event, which will be held at Warner Bros. Studios in California, could be Tesla's equivalent of Apple’s iPhone launch, heralding a new era for the company. He described it as a "watershed unveiling".
Tesla’s Robotaxi will feature fully autonomous vehicles designed to compete with ride-hailing services like Uber and Lyft. The cars will operate without drivers and are expected to include a new model, possibly called the "Cybercab," specifically designed for Tesla’s self-driving fleet.
The Robotaxi concept has been part of Musk’s vision for years, with promises of making Tesla cars capable of self-driving under the company’s Full Self-Driving (FSD) program.
2:00pm: Markets reverse course
Markets reversed once again by early afternoon in a topsy-turvey day for markets.
By midafternoon, the Nasdaq was 0.1% underwater, the S&P 500 had lost 0.3% and the Dow was down around 0.3%.
12:10pm: Shift in monetary policy expectations
Markets were mixed by midday after consumer inflation data exceeded expectations, raising concerns about future interest rate hikes.
At noon, the Nasdaq reversed course to gain 28 points, the S&P 500 traded flat and the Dow was down around 28 points.
The narrative around the US economy has taken on "more complex tones," noted Pepperstone's Quasar Elizundia, with data catching attention on both inflation and labor fronts.
"The September inflation reading surprised markets with figures that exceeded expectations across the board, generating a subtle yet important shift in monetary policy expectations," Elizundia wrote.
"The US economy is showing mixed signals, with a labor market that remains relatively resilient, but with areas of uncertainty, and inflation that could prove more persistent than expected. These data reignite the debate between a 'soft landing,' a 'no landing,' and the possibility of a 'hard landing,' though the latter remains more distant for now."
11:10am: Delta's earnings disappoint
Delta Air Lines Inc (NYSE:DAL) posted disappointing fourth quarter guidance, with the airline warning it expects reduced travel demand around the US election.
It expects the November 5 election to result in a 1 percentage point hit on its unit revenue in the December quarter.
Revenue growth is expected to be between 2% and 4% from the year-ago quarter on capacity growth of 3% to 4%. Analysts expect revenue up 2.7% at $14.6 billion.
Delta projected earnings per share (EPS) in the range of $1.60 to $1.85, at the midpoint lower than the $1.82 Wall Street consensus.
Still, shares had recovered to trade flat by midmorning Thursday around $50.90.
10:25am: Worrying trends
Inflation data points to a worrying trend in the US economy, according to XTB's Kathleen Brooks.
"Today’s US inflation report was good, but not good enough to dispel fears that US inflation could reignite in the coming months," Brooks commented.
Brooks highlights two key concerns for US inflation: reliance on weaker energy prices and rising service costs. Although annual declines in energy prices helped lower inflation recently, this trend may reverse due to geopolitical risks and China's stimulus actions, which are pushing up commodity costs.
For instance, WTI crude oil and gasoline prices have risen significantly in the past month. This could lead to higher inflation down the line, potentially delaying Fed rate cuts and maintaining upward pressure on the US dollar.
9.40am: Wall Street down as inflation and jobless claims overshoot expectations
Wall Street faced a tough start on Thursday as recent inflation and jobless claims figures both came in higher than expected.
The Nasdaq fell 0.4% early on, while the S&P 500 dipped by 0.3% and the Dow Jones lost 0.1%.
This came after inflation data for September showed prices rose by 2.4% and faster than an expected 2.3% uptick.
Analysts noted the slight surprise would support expectations for a 25 basis point rate cut by the Federal Reserve next month, after strong jobs data last week removed the prospect of a 50 basis point reduction.
US jobless claims data also came out on Thursday, showing the number of people applying for benefits last week jumped.
Applications for jobless claims climbed by 33,000 to 258,000 over the week to October 3, Labour Department figures showed.
This marked the highest reading for a year and soared past expectations for 229,000.
The rise coincided with strikes among the likes of Boeing and port workers, as well as Hurricane Helene.
Average weekly claims over the month showed figures rose by 6,750 to 231,000.
9.09am: Rate cut next month ‘on’ after inflation nudges past expectations
Thursday’s news that US inflation ticked up ahead of expectations in September is set to mean the Federal Reserve will cut interest next month, according to analysts.
US Bureau of Labour Statistics figures showed the consumer price index climbed by 2.4% in the year to September.
Though this was below the 2.5% rate seen in August, markets had been expecting the figure to climb by 2.3%.
Robinhood analyst Dan Lane noted a 25 basis point cut in the US was now “on” following the figures, as markets mulled the depth of the next reduction after expectation-beating non-farm payroll data last week.
“Last week’s strong jobs print swiped a 50 basis point cut drop off the table but the market still wants two quarter-point steps down over the last couple of meetings of the year,” he said.
“Today gives another thumbs up to that schedule as it looks like the Fed will actually pull off a soft landing after all.”
Premier Miton Investors’ Neil Birrell echoed the view, explaining the higher than expected inflation figure “shouldn’t be enough to worry markets or indeed the Fed”.
He added the figure would “probably firm up” support for a 25 basis point cut.
“As we know, one rogue number can get people worried or excited in equal measure, but there’s nothing to do that today,” Birrell added.
8.38am: US inflation slightly ahead of expectations
Inflation in the US ticked up ahead of expectations last month, driven by rising food and shelter costs, Bureau of Labour Statistics figures showed on Thursday.
The consumer price index climbed by 2.4% over the year to September, which was slower than the 2.5% rise recorded for August, but above expectations for a 2.3% uptick.
Increasing food and shelter costs were said to be the key drivers of the uptick over the month, according to the Bureau of Labour Statistics.
Core inflation, which excludes food and energy prices, also rose ahead of expectations, at 3.3% against expectations for 3.2%.
7.42am: Wall Street seen off the mark
Wall Street appeared on course to fall ahead of Thursday’s opening bell as investors awaited inflation data later on in the day.
Futures had the Nasdaq down 0.2% ahead of trading, while the Dow Jones and S&P 500 were also seen off the mark as caution appeared to take hold ahead of the inflation figures.
Markets are currently weighing the prospect of further interest rate cuts by the Federal Reserve.
Strong non-farm payroll data last week prompted expectations for a second consecutive 50 basis point cut in November to effectively vanish.
Anticipations are now for either no cut at all, or a 25 basis point reduction, with Thursday’s inflation data set to provide further clarity around the scope for either.
Markets expect the consumer price index to have subsided from August’s 2.5% to 2.3% in September.
“If there is an upside surprise like there was to payrolls, then we could see a bigger chance of no rate cut from the Fed next month,” XTB analyst Kathleen Brooks said.
“However, a reading in line with expectations would suggest that the goldilocks scenario for the US economy carries on, which is good news for both bonds and equities.”