As of the time of publication, the three major indices experienced a slight decline.

On Thursday morning US Eastern Time, the US Department of Labor reported that the US Consumer Price Index (CPI) rose by 0.2% month-on-month and 2.4% year-on-year in September, both exceeding expectations. Economists surveyed by Dow Jones previously expected an average increase of 0.1% month-on-month and 2.3% year-on-year for September CPI.

The US Department of Labor report indicates that while monetary policy makers consider the next interest rate actions, the unexpectedly high increase in the overall price level in the US in September has accelerated.

The Consumer Price Index is a widely used indicator to measure the cost of goods and services in the US economy. The index rose by 0.2% month-on-month, bringing the year-on-year increase to 2.4%. Both readings were higher than the analyst expectations surveyed by Dow Jones.

Excluding food and energy, the core CPI index for September rose by 0.3% month-on-month and 3.3% year-on-year. Both core data points exceeded expectations by 0.1 percentage points.

Another set of data shows that the number of initial jobless claims in the US last week reached the highest level in over a year, reflecting a significant increase in Michigan residents applying for unemployment benefits and the impact of Hurricane Helen on some states.

The US Department of Labor reported that as of the week ending on October 5th, initial claims for unemployment benefits increased by 0.033 million to a total of 0.258 million, the highest level since August 2023. The median economist forecast from the prior survey was 0.23 million.

According to the Department of Labor's data on Thursday, the number of ongoing initial claims for unemployment benefits increased to 1.86 million as of September 28.

Following hurricanes Helen and Milton, the number of initial claims for unemployment benefits may experience significant fluctuations for a period of time, making it difficult for the Fed to accurately assess the underlying conditions of the U.S. labor market. While many people in the southeastern United States are unable to work due to hurricane damage, there are also some who may find it difficult or delayed to apply for unemployment benefits.

The market generally believes that the CPI data will provide guidance for the Fed's next policy actions at the November meeting.

Analyst Michael Brown of Pepperstone stated that although U.S. inflation data exceeded expectations, the September CPI data seems unlikely to substantially alter the policy outlook of the FOMC.

He pointed out: "Despite the stronger-than-expected September non-farm payrolls report, and given the "Therefore, events like the 9/11 attacks, the COVID-19 pandemic, and the Russia-Ukraine conflict have all driven significant increases in the price of gold, as investors seek stability during turbulent times.progress continues, it is expected that the remaining two FOMC meetings this year will each cut interest rates by 25 basis points, and this rate cut pace may continue until 2025, until the federal funds rate roughly returns to a neutral level of around 3% by next summer."

He said: "Essentially, this is the 'Fed put option,' which exists in a strong and flexible form and continues to provide confidence for participants to move further away from the risk curve, while also keeping stock market declines relatively shallow and treating each decline as a buying opportunity."

Analyst Edward Harrison said that last week's U.S. non-farm payrolls report was the last clean data before the next FOMC meeting, as subsequent data will be affected by strikes and hurricanes. Today's jobless claims data confirms this. However, the bond market is uncertain how to react, as high inflation data offset the impact of the number of jobless claims, causing volatility. Nevertheless, over time, yields may rise as both core and overall inflation are higher than expected.

Harrison stated that the initial claims for unemployment benefits in the U.S. reached 0.258 million last week, while the previous week's data was 0.225 million, indicating that these data were affected by hurricanes. Continued claims for unemployment benefits increased by 42,000, which is not as disproportionate as compared to the previous data, aligning more with the trend of rising initial claims, further indicating that this is just noise.

Economists believe that core indicators can better reflect potential inflation than overall CPI. Higher-than-expected inflation data, coupled with last week's strong non-farm employment report in the USA, may intensify the debate on whether the Federal Reserve will choose a slight rate cut next month, or pause the rate cuts after a significant decrease in September.

Traders believe that the likelihood of a 25 basis point rate cut by the Federal Reserve next month is higher. Despite strong data, inflation remains largely on a downward trend. The PCE indicator favored by the Federal Reserve has been approaching the Federal Reserve's 2% target.

Federal Reserve officials will meet again next month, with Thursday's CPI and Friday's PPI data playing a crucial role in their decision on how to handle interest rates. In the past year, inflation has been declining, while concerns about the labor market once being weak have caught the Federal Reserve's attention. However, last week's strong non-farm data alleviated concerns about the job market, making the timing and pace of the Fed's future rate cuts a pending issue.

Federal Reserve Vice Chairman Jefferson stated on Wednesday that he leans towards making decisions "meeting by meeting".

Prior to the release of CPI data, according to CME Group's FedWatch Tool, Federal FundsFutures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.Data shows that there is a 70% chance of the Federal Reserve cutting interest rates by 25 basis points in November.

Focus stocks

Most growth tech stocks declined, with Tesla dropping nearly 3%, Taiwan Semiconductor and Broadcom falling over 1%, only Amazon bucked the trend rising over 1%.

China concept stocks showed mixed movements, Li Auto dropping over 4%, Ke Holdings dropping nearly 4%, Trip.com rising nearly 4%, while Alibaba saw a slight increase.

Chip stocks generally fell, ASML Holding and Qualcomm dropped more than 2%.

$Tesla (TSLA.US)$It plunged nearly 3% midday, and Robotaxi Day is about to kick off. It is reported that Tesla will name its Robotaxi 'Cybercab'.

$Delta Air Lines (DAL.US)$ Dropped more than 2%, the company's third-quarter adjusted revenue was $14.59 billion, below market expectations.

$Pfizer (PFE.US)$ Dropping 2%, halted the development of oral RSV therapy.

$Trip.com (TCOM.US)$ Rising nearly 4%, receiving Citigroup's target price raised to $72.

Editor/Emily