September inflation data came in cooler than expected, reinforcing bets that the Federal Reserve will press ahead with interest-rate cuts — and giving President Donald Trump a narrative win as he touted that his tariffs aren't fueling broad-based price increases.
The headline Consumer Price Index rose 3% year-over-year, according to Friday's report from the Bureau of Labor Statistics –released after a nine-day delay due to the government shutdown. That was below the expected 3.1% and up slightly from 2.9% in August.
On a monthly basis, prices increased 0.3%, slowing from the 0.4% pace in August.
Core inflation, which strips out food and energy prices, also softened. It rose 3% year-over-year, down from 3.1% in August and below economists' forecasts for no change.
Monthly core inflation increased 0.2%, a step down from both the previous and expected 0.3%.
Trump Claims Victory on Tariffs
Before the CPI data was released, Trump posted a message on Truth Social touting tariffs as a key driver of economic strength.
"The stock market is stronger than ever before because of tariffs. The United States is wealthy, powerful, and nationally secure again, all because of tariffs. The most important case ever is in the United States Supreme Court. God bless America," Trump wrote.
Markets Surge To New Highs On CPI
Wall Street jumped to fresh record highs Friday morning as investors embraced the cooler inflation report and welcomed news that Trump and Chinese President Xi Jinping are expected to meet next week.
Fed futures show a 25-basis-point rate cut at the Oct. 30 FOMC meeting is now fully priced in. Markets also assign a 94% probability of another cut in December, with a small 3% chance of a larger, 50-point move.
The S&P 500 index – as tracked by the Vanguard S&P 500 ETF (NYSE:VOO) – opened 0.8% higher at 6,790 points, reaching a new all-time high.
The Nasdaq 100 – tracked by the Invesco QQQ Trust (NASDAQ:QQQ) – rose 1% to 25,350, also hitting a record.
10 Stocks Rallying After CPI Data
According to Benzinga Pro Movers, these were the top 10 S&P 500 gainers – with at least $10 billion of market capitalization – in the hour following the CPI release:
- Howmet Aerospace Inc. (NYSE:HWM) +2.01%
- O'Reilly Automotive Inc. (NASDAQ:ORLY) +1.75%
- Robinhood Markets Inc. (NASDAQ:HOOD) +1.71%
- Barrick Gold Corp. (NYSE:GOLD) +1.57%
- Agnico Eagle Mines Ltd. (NYSE:AEM) +1.35%
- Marvell Technology Inc. (NASDAQ:MRVL) +1.33%
- Monolithic Power Systems Inc. (NASDAQ:MPWR) +1.30%
- United Rentals Inc. (NYSE:URI) +1.22%
- Palantir Technologies Inc. (NYSE:PLTR) +1.20%
- Apollo Asset Management Inc. (NYSE:APO) +1.17%
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Image created using artificial intelligence via Midjourney.
