US benchmark equity indexes saw increases in intraday trading following official reports indicating consumer inflation matched Wall Street's expectations for October. The Dow Jones Industrial Average climbed 0.4% to 44,079.5 by midday Wednesday, while both the S&P 500 and Nasdaq Composite ascended by 0.3%, finishing at 6,004.6 and 19,340.9, respectively.
The consumer discretionary sector led the gains, whereas utilities experienced the steepest declines. Recent economic data revealed that the US consumer price index rose by 0.2% last month, maintaining the same growth rate observed from July through September, as reported by the Bureau of Labor Statistics.
Year-on-year, inflation showed an uptick to 2.6%, compared to September's rate of 2.4%. TD Economics commented, "Progress on the inflation front has slowed to a snail's pace in recent months as services inflation is looking increasingly sticky, while much of the disinflationary pressure from falling goods prices is now in the rear-view mirror.
All of this suggests that the last leg lower on returning inflation to the (Federal Reserve's) 2% target is going to occur much more gradually." The likelihood of policymakers implementing a 25 basis point reduction in their benchmark lending rate next month surged to approximately 82% on Wednesday, rising from the previous day's 59%, according to the CME FedWatch tool.
The remaining probabilities indicate that interest rates may remain unchanged. Producer price information for October is anticipated to be disclosed on Thursday. In the mortgage sector, application volume in the US increased for the first time in seven weeks, even though the 30-year fixed rate for conforming loan balances also rose, as per the Mortgage Bankers Association. The intraday rise for the US 10-year yield reached two basis points, hitting 4.45%, while the two-year rate dipped 5.8 basis points to 4.29%. Federal Open Market Committee's discussions suggest a need for further easing of monetary policy.
"It's best to proceed with caution," noted Dallas Fed President Lorie Logan. "It's difficult to be sure how many cuts may be needed and how soon they may need to happen." In corporate developments, Charter Communications ($CHTR) announced its plans to acquire Liberty Broadband ($LBRDA, $LBRDK) through an all-stock arrangement.
As a result, Charter shares surged 5.5%, marking one of the top performers on both the S&P 500 and Nasdaq, while Liberty's series A and C common shares each dipped by over 3%. Rivian Automotive ($RIVN) saw its shares soar by nearly 18% after German auto giant Volkswagen Group disclosed an agreement to invest up to $5.8 billion in the US electric vehicle manufacturer and their new joint venture by 2027, a significant increase from the previously agreed $5 billion investment, according to the companies late Tuesday. Super Micro Computer ($SMCI) announced that it cannot submit its quarterly report for the period ending September 30 on schedule, leading to a 4.8% decline in its shares intraday— the largest drop on the Nasdaq and one of the worst on the S&P 500. Cisco Systems ($CSCO) is slated to unveil its most recent quarterly financial results after the market closes on Wednesday. West Texas Intermediate crude oil prices rose 0.7% to reach $68.6 per barrel intraday. Gold prices fell by 0.8%, settling at $2,586.50 per troy ounce, while silver price slipped 0.3% to $30.68 per ounce..