US Stocks Rise on Positive Inflation Data

U.S. stock markets saw gains led by the S&P 500 and Nasdaq, rising 0.7% and 1.4% respectively, following a consumer price index (CPI) report that aligned with expectations, suggesting a 25 basis point interest rate cut by the Federal Reserve next week. The CPI increased by 0.3%, resulting in a year-on-year inflation rate of 2.7%, while core inflation remained steady at 3.3%. Despite positive market reactions, experts caution about persistent inflation pressures that may complicate future rate adjustments, particularly in 2025. The labor market shows signs of weakening, with an uptick in the unemployment rate to 4.2%, raising questions about economic stability. Investors are closely monitoring the Fed's upcoming decisions amid a backdrop of mixed economic signals. As optimism grows, some analysts remain wary of potential inflationary surprises that could affect monetary policy direction.