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On Friday, the S&P 500 Index rose by 0.79%, the Dow Jones Industrials Index by 1.01%, and the Nasdaq 100 Index by 1.04%, reaching new record highs. This uptick follows a slightly weaker-than-expected September CPI report, which recorded a 0.3% month-over-month and 3.0% year-over-year increase, below market expectations of 0.4% and 3.1% respectively. The markets are currently focusing on the upcoming U.S.-China trade talks amid ongoing tensions, particularly after President Trump announced the termination of trade negotiations with Canada.
Bloomberg Economics estimates that the U.S. government shutdown, now in its fourth week, will furlough 640,000 federal workers, potentially increasing the unemployment rate to 4.7%. The markets are anticipating a 97% chance of a 25 basis point rate cut at the Federal Reserve’s upcoming meeting on October 28-29, as signs of economic slowdown emerge.
In corporate stocks, Ford saw a robust increase of over 12% after surpassing earnings expectations, while Newmont fell by more than 6% due to concerns over gold production forecasts. Overall, 85% of the S&P 500 companies that have reported earnings thus far have exceeded forecasts, with projected Q3 profits up by 7.2% year-over-year, the smallest increase in two years.
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