Stocks Dip From Record Highs Amid Warmer CPI, Cooler Jobs Data: Market Wrap
US stocks slipped from their recent highs as inflation data came in hotter than expected and jobless claims hit a yearly peak, raising concerns about the Federal Reserve’s next move. The core Consumer Price Index (CPI), which excludes volatile food and energy prices, rose 0.3% from August and 3.3% year-over-year, stalling some of the progress made in combating inflation. At the same time, applications for unemployment benefits surged to their highest level in over a year, largely driven by increases in Michigan and areas affected by Hurricane Helene.
After reaching all-time highs earlier in the week, the S&P 500 retreated slightly, down 0.2%. While Thursday’s economic data didn’t signal an immediate crisis, it heightened speculation about the Fed’s future rate cuts. Bond traders are now anticipating that the Fed will reduce its rate cut pace to 25 basis points in November. The 10-year Treasury yield edged up by two basis points to 4.09%, and the Bloomberg Dollar Spot Index remained stable.
Corporate Highlights:
- Delta Air Lines Inc. (DAL) issued a profit and sales forecast below Wall Street’s expectations for the year’s final quarter, citing a slow recovery after a challenging summer travel season.
- Domino’s Pizza Inc. (DPZ) lowered its 2024 sales growth and new location projections as consumer spending slows, impacting the restaurant industry.
- Former Pfizer Inc. (PFE) executives Ian Read and Frank D’Amelio have opted out of Starboard Value’s (PRIVATE) activist campaign against the pharmaceutical company.
- GXO Logistics Inc., (GXO) a supply-chain services company that spun off from XPO Inc. (XPO) in 2021, is reportedly exploring a sale, according to sources familiar with the matter.
- Eli Lilly & Co. (LLY) is intensifying its legal actions against firms that sold copycat versions of its blockbuster weight-loss drugs during a temporary US shortage.
- Toronto-Dominion Bank (TD) will pay approximately $3 billion in penalties and face restrictions on its US expansion after settling with regulators over its failure to detect money laundering, according to the Wall Street Journal.
