CPI data came in hotter than expected with inflation reaching 3.7 percent on an annualized basis compared to an expected 3.6 percent. Core CPI was also hotter than expected coming in at 2.6 percent on an annualized basis compared to an expected 2.5 percent. This has led to speculation that the Fed may decide to hike rates again by the end of the year.
Fed Chair Warsh refused to say whether the Fed would hike in October or December. He said that while inflation was an issue throughout the world, he didn’t want to telegraph what the Fed would do. He also said that it was important to take each meeting on its own merits, which is another reason why he doesn’t like to provide forward guidance.
The Price Producers Index (PPI) came in at 1.3 percent compared to an expected 0.8 percent in September. Core PPI came in at 0.7 percent compared to an expected 0.3 percent prior to the release. Retail sales were up 0.8 percent, which was much higher than the anticipated 0.3 percent prior to the release. Core retail sales were up 0.9 percent in September.
Unemployment claims remained steady for another week coming in at 199,000 over the last seven days. This was in line with expectations and just 1,000 more than last week’s figure.
The S&P 500 was down 2 percent this week to close at 7,659 at the end of trading on Friday. The index lost 157 points during the last five trading days and is now up 0.72 percent over the last month. This week, the market made a high of 7,814 Monday morning before falling steadily on Tuesday, Wednesday and Thursday. The index closed near its weekly low on Friday.
The Dow was up 0.25 percent this week to close at 52,002 at the end of the day on Friday. This was a gain of 131 points since the beginning of the week. The market is now down 0.87 percent over the past month. This week, the index made a low of 51,347 on Wednesday and a high of 52,537 on Friday morning.
Finally, the Nasdaq was down 4.33 percent to close at 26,140 at the end of trading Friday. This was a loss of 1,183 points for an index that has generally outperformed its peers in 2026. The market is essentially flat over the last month.
Australia announced Wednesday night that its economy lost over 39,000 jobs in September and that the country’s unemployment rate ticked up to 4.7 percent. On Thursday, Great Britain announced that its gross domestic product (GDP) grew by 0.1 percent in September.
This coming week should be another interesting one as a number of important news events are on the calendar. Unemployment claims data comes out on Thursday while the University of Michigan comes out with consumer sentiment and inflation expectation data on Friday. Canada will announce its inflation data for September on Monday while Great Britain will do the same on Wednesday.