📰 US September CPI Rises To 3.7% YoY, Odds Of October Rate Hike Climb; S&P And Nasdaq Log Biggest Single-Day Drop In Months

Key Snapshot

· 📊 US September CPI rose 3.7% YoY and 0.6% MoM, driven largely by surging gasoline prices, in line with forecasts. Probability of a Fed rate hike in October increased.

· 📉 S&P 500 fell 1.11%, marking its sharpest one-day decline since July 29. Nasdaq dropped 1.88%, its worst single-day performance since July 23.

I. Market Outlook

Core Events

- US September CPI Hits 3.7% YoY, Hike Probability Rises: CPI climbed 0.6% month-over-month, up from 0.4% in August and matching consensus. The 3.7% year-over-year reading exceeded August’s 3.4%, with gasoline price spikes as the primary driver. → S&P 500 -1.11% to 7718.94, largest one-day drop since July 29; Nasdaq -1.88% to 26692.87, biggest decline since July 23; Dow Jones -0.09% to 51621.48.

Exclusive View

The 3.7% YoY CPI reading confirms accelerating pass-through from energy costs into broad inflation. San Francisco Fed President Daly signaled the Fed is inclined to hold rates steady in October while keeping further hikes on the table. Still, the multi-month single-day selloff in S&P and Nasdaq shows markets are repricing for sticky inflation and higher-for-longer rates. Gold tumbled 1.46% and silver plunged 6.20%, breaking key technical support. Non-yielding assets bear the brunt as interest rates move higher.

II. Overnight Market Performance

—— US Equities: S&P 500 -1.11% at 7718.94, largest single-day drop since July 29; Nasdaq -1.88% at 26692.87, worst decline since July 23; Dow Jones -0.09% at 51621.48.

—— European Equities: STOXX 600 +0.43% to 637.75. ASML gained 1.2%.

—— Fixed Income: 10-year US Treasury yield closed at 5.19%.

—— Commodities: WTI November contract +1.01% to $95.09/bbl; Brent +0.35% to $106.06/bbl. COMEX Gold -1.46% to $4121.90/oz; Silver -6.20% to $55.70/oz, breaking critical technical support.

—— FX: US Dollar Index +0.34% to 102.53. Euro fell 0.41% to 1.1156 USD, hitting a 17-month low. EUR/GBP touched a 16-month trough.

—— Crypto: Bitcoin dipped below $82,000, down nearly 2% over 24 hours.

III. Macro News

1. 📊 US September CPI Up 3.7% YoY, Gasoline Surge The Main Driver: CPI rose 0.6% MoM versus 0.4% in August; 3.7% YoY versus August’s 3.4%, matching market expectations. Odds for an October Fed rate hike rose.

Insight: Surging gasoline prices pushed CPI higher, validating energy inflation spillover into broader prices. Markets are repricing for persistent inflation and higher-for-longer interest rates.

2. 🏛️ Daly: Further Hikes May Be Needed, But No Action Required In October: San Francisco Fed President Mary Daly said additional short-term rate increases may be needed to tame inflation, yet suggested policymakers can skip tightening at the October meeting.

Insight: Daly’s remarks signal a hawkish pause: hold steady in October while preserving the option for future hikes.

IV. Global Corporate News

1. 💾 ASML Q3 Net Profit Hits €4.96 Billion, Beats Estimates, Raises Full-Year Guidance; Orders Booked Through 2030: Strong results failed to stop global chip shares from sliding. Positive earnings were largely priced in, and investors now focus on sustainability of AI capital spending.

2. 🤖 Anthropic Q3 Revenue Rises To $16.8 Billion, Up 46% QoQ; Adjusted Profit And Positive Free Cash Flow: Profitability continues to improve among leading AI application-layer firms.

3. 📺 Netflix To Cut Roughly 6% Of Staff, Around 1,000 Employees, Its Largest Layoff Round Since 2022: The streaming giant keeps cutting costs amid slowing growth.

V. Key Watchlist For Today

· 📊 US September PPI: Consensus expects 5.3% YoY, prior reading 5.4%.

· 📊 US September Retail Sales: Market forecasts +0.25% MoM, prior 1.2%.

· 📊 US Initial Jobless Claims for week ending Oct 10: Expected 200,000, prior 197,000.

· 📊 New York Fed Empire State Manufacturing Index and Philadelphia Fed Manufacturing Index for October.