A cooler-than-expected inflation report has strengthened expectations that the Federal Reserve will cut interest rates at its next meeting on Oct. 29.
Inflation Slows More Than Forecasted
U.S. inflation rose 3% year-over-year in September, slightly higher than August’s 2.9% but below economists’ 3.1% forecast. Core inflation, excluding food and energy, also eased to 3%, signaling continued progress in cooling prices.
Markets Hit Record Highs
The data sparked optimism on Wall Street, pushing major indexes to record highs. Investors now anticipate two more rate cuts this year and additional reductions in 2026.
Automakers Lead Market Gains
Detroit’s automakers were standout performers.
- General Motors stock surged 15% after beating quarterly earnings expectations, reporting $48.6 billion in revenue and announcing new hands-free driving features by 2028.
- Ford jumped 10% on strong results, with $50.5 billion in revenue and plans to boost truck production by over 50,000 units in 2026.
Mixed Corporate Results
Not all sectors shared in the rally — Netflix shares fell over 10% after missing earnings due to a $619 million tax charge in Brazil.
As inflation cools and corporate earnings strengthen, markets are betting the Fed will begin a gradual rate-cut cycle to sustain economic momentum.
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