U.S. Inflation Eases to 3%, Stocks Rally on Rate-Cut Hopes

U.S. inflation data for September showed a softer increase than expected, with the Consumer Price Index (CPI) rising 0.3% month-over-month and the annual inflation rate at 3.0%, below economists' forecasts. Core inflation, which excludes food and energy prices, also rose by 0.2% monthly and held steady at 3.0% annually, signaling a slight easing in inflationary pressures. This softer inflation reading has positively impacted U.S. equities, with major indices like the S&P 500, Dow Jones, and Nasdaq seeing gains, driven by expectations of a potential Federal Reserve interest rate cut. The inflation report, released during the government shutdown, was closely watched and has increased market confidence that the Fed will continue lowering rates in upcoming months. Additionally, upbeat earnings reports from companies such as Intel, Ford, and Procter & Gamble have further supported positive market sentiment. Despite some concerns, such as a drop in consumer sentiment and President Trump's termination of trade negotiations with Canada, the overall market response was favorable to the inflation data and corporate earnings news.