“Breaking Down the Latest CPI Data and Market Open on Morning Brief with Seana Smith and Brad Smith”

The latest Consumer Price Index (CPI) report for September has shown a 0.2% increase in prices, surpassing the 0.1% estimate from Bloomberg. Year-over-year, prices rose by 2.4%, higher than the 2.3% estimate. When excluding food and energy components, prices rose by 0.3% month-over-month and 3.3% year-over-year, both exceeding economists’ expectations.

Following the release of the CPI data, US stocks (^DJI, ^IXIC, ^GSPC) opened lower as Wall Street absorbed the news. The Nasdaq Composite fell by over 0.40% in response to the hotter-than-expected CPI report.

Yardeni Research Chief Markets Strategist Eric Wallerstein believes that the Federal Reserve may not need to cut rates for the rest of 2024, citing the current inflation levels. He does not foresee any crisis in the labor market that would warrant further rate cuts this year.

Omair Sharif, Inflation Insights president, acknowledges that some aspects of the CPI report were higher than expected but views them as likely to be temporary. He believes that the Fed’s plan for a 50 bps cut at the November meeting may have been impacted by the recent data, with a 25 bps cut now being the base case.

Marvin Loh, State Street senior global macro strategist, discusses the impact of the Fed’s rate-cutting cycle on the tech sector. He sees tech as one of the sectors that will benefit from the rate cuts, given its strong earnings growth and stability in the market.

Delta Air Lines (DAL) reported third-quarter profits slightly below estimates, citing a tech disruption from CrowdStrike (CRWD) that affected its adjusted earnings per share. Labor costs were also up 13% year-over-year, posing challenges for the airline industry.

Oil prices rose as Hurricane Milton hit Florida and amid geopolitical tensions in the Middle East. Andy Lipow, president of Lipow Oil Associates, highlighted the market’s concerns about a potential war between Iran and Israel leading to supply disruptions.

In conclusion, the latest CPI data has stirred market reactions and raised questions about the Fed’s future rate-cutting decisions. The tech sector and airline industry are facing challenges, while oil prices are influenced by geopolitical events. Investors will need to monitor these developments closely to navigate the current economic landscape effectively.