CPI Sparks Market Surge: U.S. Stocks Hit Record Highs

Market Overview

Last Friday, U.S. September core CPI growth slowed, fueling expectations for two Federal Reserve rate cuts by the end of the year. The data ignited a rally across equities, with tech and small-cap stocks leading gains. The S&P 500, Nasdaq, and Dow Jones Industrial Average all closed at new record highs, with the Dow surpassing 47,000 points for the first time.

Among individual movers, Apple hit a fresh all-time high, IBM and AMD surged on news of a new partnership, and Ford Motor Co. skyrocketed 12%, marking its biggest single-day gain in four years.

However, volatility intensified as investors digested CPI data alongside a stronger-than-expected Markit PMI. The CPI initially triggered a sell-off in Treasury yields and the U.S. dollar, but PMI figures prompted a sharp rebound — forming a classic “V-shaped” reversal. The 10-year Treasury yield ultimately finished above 4%, while the U.S. dollar index ended little changed.

In commodities, gold briefly spiked following the CPI release but reversed to close lower in late New York trading, while oil prices paused their rally. As Mondays Asian session began, U.S. equity futures opened higher, whereas spot gold gapped down more than 1%.

Hot Topics Ahead

• Argentinas Milei Secures Midterm Victory, Reform Momentum Builds

President Javier Milei‘s La Libertad Avanza party captured 41% of the vote in Argentina’s midterm elections, winning 64 seats in the lower house — enough to safeguard his presidential veto power. Analysts say the outcome serves as a public endorsement of his aggressive austerity reforms, reversing September‘s local election losses. The U.S.’s $20 billion currency-swap support appears to be paying off.

• “Super Central Bank Week” in Focus

On October 30, the Federal Reserve is set to meet, with markets broadly expecting another 25-basis-point rate cut. Both the Bank of Japan and the European Central Bank will announce their policy decisions on the same day.

The BOJ, while facing sustained inflation pressures, remains cautious about tightening too early and may delay a rate hike until December. Meanwhile, the ECB is expected to hold rates steady, balancing slightly higher inflation and a stronger euro. Several ECB officials have already dismissed the likelihood of further rate cuts. Following the announcements, Governor Kazuo Ueda and President Christine Lagarde will hold separate press conferences to discuss monetary policy outlooks.

Key Event to Watch (GMT+8)

22:30 — U.S. Dallas Fed Manufacturing Activity Index (October)