A man shops for produce at a supermarket in Monterey Park, California, on September 9, 2025.
Frederick J. Brown | AFP | Getty Images
A milder-than-expected US inflation report in September sparked optimism in the market. Traders now expect the U.S. Federal Reserve to almost certainly cut interest rates at its October and December meetings scheduled for later this week.
Major U.S. indexes rose on Friday, marking their second consecutive week of positive results. S&P500, Nasdaq Composite and Dow Jones Industrial Average Overall, prices rose about 2% for the week.
The inflation report provides further support to a market already buoyed by a strong earnings season. According to LSEG, of the companies that have reported so far, 87% were able to beat Wall Street expectations, well above the typical beat rate of 67%. The market could reach new highs if Big Tech companies report better-than-expected earnings this week and offer positive outlooks.
However, US President Donald Trump’s tariffs continue to give a cold impression amid warm sentiments. President Trump on Saturday imposed a 10% tariff on Canada as punishment for the advertising.
Economists have warned that tariffs will lead to higher prices. In fact, although the Consumer Price Index report was lower than expected, the headline annual rate rose to 3% in September from 2.9% the previous month.
“Inflation may not be slowing, but it would no longer be surprising to see it rise,” said David Russell, global head of market strategy at TradeStation.
A lack of other data, such as employment statistics, due to the U.S. government shutdown means that a broader picture of economic conditions is unclear, and the market’s rally could be balanced on a shaky shelf.
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Trade trends at the ASEAN Summit. U.S. and Chinese officials met on Sunday, resulting in a “very successful framework” for talks between Trump and Xi, according to Scott Bessent of the U.S. Treasury Department. President Trump announced agreements with four Southeast Asian countries.
China’s industrial profits surged in September. The Chinese government’s efforts to curb price competition among manufacturers also provided a tailwind, leading to a 21.6% year-on-year increase. The profit growth was the largest since November 2023 and exceeded the 20.4% year-on-year increase in August.
HSBC recognizes a provision of $1.1 billion. The bank lost some of its appeals related to Bernard Madoff’s fraud scheme, but said it would appeal again. The $1.1 billion reserve will be included in the company’s third quarter results to be released on Tuesday.
Stock prices rose in response to CPI statistics. Major U.S. indexes rose on Friday, with the Dow Jones Industrial Average closing above 47,000 for the first time. U.S. stock futures rose on Sunday evening. Asia-Pacific markets rose on Monday, with Japanese markets also Nikkei Stock Average It was the first time the number of people exceeded 50,000.
(PRO) UBS says don’t overlook Asian stocks. As the U.S. stock market soars, investors should consider adding Asian stocks, bonds and gold to their portfolios for diversification, the Swiss bank said in a note Friday.
And finally…
US President Donald Trump (left) and Chinese President Xi Jinping.
Jim Watson and Peter Crownser | Poole (AFP) | Getty Images
Trump to meet with China’s Xi for first time in second term as trade deal remains unresolved
White House press secretary Caroline Levitt told reporters last week that President Trump will meet with Chinese President Xi Jinping on October 30 on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit.
This is the first direct meeting between the two leaders since Trump returned to office in January. The high-stakes meeting comes as delicate measures to ease trade tensions between the world’s largest economies are set to expire on November 10 unless they can agree to extend them again.
— Anique Bao
