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Weekly Market Recap: Earnings, Inflation Data, and Fed Rate Outlook Thumbnail

Weekly Market Recap: Earnings, Inflation Data, and Fed Rate Outlook

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Market Overview 

U.S. equities posted weekly gains, with the S&P 500 and Nasdaq Composite rising over 1% each, despite volatile trading. Growth stocks outpaced value, and small caps advanced. Economic data and shifting Federal Reserve expectations influenced markets, as stronger jobs data initially weighed on stocks but optimism about a soft landing persisted. Bank earnings led by Wells Fargo and JPMorgan were strong, while big tech companies like Amazon and Alphabet faced scrutiny over new antitrust actions. European stocks gained ahead of the ECB meeting, supported by rate-cut hopes, but concerns arose from reports of potential Chinese tariffs on luxury and auto imports. In Asia, China's muted markets reflected ongoing stimulus uncertainties, while Japan and South Korea advanced on mixed economic data. Taiwan gained, driven by strong results from Taiwan Semiconductor, offsetting Samsung’s weaker performance. 

Federal Reserve Insights and Economic Roundup 

Fed rate-cut expectations were repriced throughout the week, with market focus shifting after mixed inflation data. Treasury yields rose, with the 10-year yield nearing 4.08%—driven by stronger economic growth signals and inflation expectations. September’s hotter-than-expected Consumer Price Index (CPI) and higher jobless claims highlighted ongoing labor market cooling but suggested inflation risks remain. Producer Price Index (PPI) data was neutral, with flat final demand, signaling some inflation progress. 

FOMC meeting minutes revealed broad support for a 0.5% rate cut, but the likelihood of smaller, incremental cuts in upcoming meetings grew. While inflation expectations remain relatively contained, the Fed’s focus on balancing inflation and employment continues to shape rate decisions. 

The Week Ahead 

The upcoming week features key data releases, including: 

  • Monday: New York Fed 1-Year Inflation Expectations (Sep) 
  • Tuesday: Empire Manufacturing (Oct), Monthly Budget Statement (Sep) 
  • Wednesday: Mortgage Applications (Oct 11), Import and Export Price Indexes (Sep) 
  • Thursday: Retail Sales (Sep), Philadelphia Fed Business Outlook (Oct), Jobless Claims (Oct 12), Industrial Production and Capacity Utilization (Sep) 
  • Friday: Housing Starts and Building Permits (Sep) 

Volatility in the bond and equity markets is expected to continue as investors react to economic indicators and Fed policy developments ahead of the next Fed meeting.