US September inflation exceeded expectations across the board, with overall CPI rising by 2.4% year-on-year and 0.2% month-on-month, higher than market expectations. Core CPI increased by 3.3% year-on-year and 0.3% month-on-month, also surpassing expectations. However, the nominal CPI witnessed the lowest increase in three and a half years. The US labor market slowed down, with initial jobless claims surging unexpectedly to the highest level in over a year, reaching 258,000.

Several high-ranking Federal Reserve officials expressed no concerns over the September CPI. New York Fed President Williams, considered the third in line at the Fed, stated that the downward inflation trend remains quite stable. Chicago Fed President Evans, a voting member next year, is not too concerned about the higher-than-expected September CPI. Richmond Fed President Barkin expressed increasing confidence in controlling inflation.

These remarks eased market concerns about higher-than-expected inflation and shifted focus to the labor market. This led to an increase in the likelihood of a 25 basis point rate cut in November from 80.3% to 86.9%, with an expected total cut of 46 basis points by 2024. However, Fed President Bostic of the Atlanta Fed, also a voting member this year, hawkishly stated he doesn't oppose pausing rate cuts in November. The 2-year US Treasury yield briefly fell by more than 6 basis points, while the 10-year yield rose by over 6 basis points intraday, surpassing 4.10% to a ten-week high.

The decline in the US dollar and US Treasury yields supported the rise of precious metals. Spot gold surged nearly 1%, ending a six-day decline, while spot silver rose by over 2.2%, breaking a three-day decline. CPI weighed on US stocks, leading to a drop, especially in small cap stocks more sensitive to economic cycles.

US stocks opened lower, attempted to turn higher during midday trading, but then collectively fell again. Small cap stocks sensitive to interest rate policies dropped by 1% at their worst, with the Dow and S&P diverging from their historical highs. Real estate, communications services, and daily consumer goods sectors led the decline, with only energy, raw materials, and technology sectors rising. The China Concept Index initially fell by over 0.8% before turning higher, eventually rising by 1.5%.

• US stock indexes fell across the board. The S&P 500 index closed down 0.21% at 5780.05 points. The Dow, which is closely related to the economic cycle, fell 57.88 points or 0.14% to 42454.12 points. The Nasdaq, which is mostly composed of technology stocks, fell 0.05% to 18282.05 points. The Nasdaq 100 fell 0.12%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology sector stocks, closed up 0.036%. The Russell 2000 small cap stock index, which is more sensitive to the economic cycle, fell 0.55%. The VIX fear index was flat, closing at 20.86.

• Most US industry ETFs closed lower. The energy sector ETF rose 0.68%, while the global aviation ETF and internet-related stocks ETF each rose less than 0.5%. However, ETFs in consumer discretionary, consumer staples, healthcare, global technology stocks, financials, and utilities all fell by at least 0.3%.

• Most of the 11 sectors of the S&P 500 index declined. The energy sector rose 0.79%, materials sector rose 0.21%, technology sector rose 0.08%, consumer discretionary sector fell 0.26%, healthcare sector fell 0.35%, industrial sector fell 0.54%, financial sector fell 0.32%, consumer staples sector fell 0.54%, utilities sector fell 0.31%, communications services sector fell 0.61%, and real estate sector fell 0.89%.

• The 'Tech Big Seven' saw more declines than gains. Nvidia rose 1.63%, Amazon rose 0.80%, and Google Class A shares rose 0.22%. Apple fell 0.22%, Microsoft fell 0.39%, Tesla fell 3.6% before recovering to a 0.95% loss after the robotaxi announcement, and Meta fell 1.15%.

• Most chip stocks declined. The Philadelphia Semiconductor Index dropped 0.53%, the SOXX ETF fell 0.7%, Nvidia 2x leveraged ETF rose 3.26%. TSMC ADR fell 0.73%. Broadcom fell 0.14%, Intel fell 1.02%, KLA Corp fell 0.83%, Qualcomm fell 1%, ASML Holding ADR fell 1.41%, AMD fell over 5% before recovering to a 4% decline after introducing the MI325X AI accelerator, claiming performance superiority over Nvidia. Micron Technology rose 3.92%, and Arm Holdings rose 0.61%.

• AI concept stocks saw mixed movements. BullFrog AI rose 0.4%, Nvidia-backed AI voice company SoundHound AI rose 4.54%, Snowflake rose 3.44%, C3.ai rose 0.5%, Dell Technologies rose 2.01%, CrowdStrike rose 5.56%, Palantir rose 0.9%, while Super Micro Computer fell 1.73%. Serve Robotics fell 6.93%, BigBear.ai fell 2.6%, and Oracle fell 1.39%.

• China concept stocks diverged. The Nasdaq Golden Dragon Index rose by 0.3%, the China Technology Index ETF (CQQQ) fell by 1.62%, the China Internet Index ETF (KWEB) rose by 0.23%, the FTSE China 3x Bull ETF (YINN) rose by 3.45%, the FTSE China 3x Bear ETF (YANG) fell by 3.28%, the 'China Dragon' ETF DRAG rose by 1.06%, XtrackersHarvest CSI 50 (ASHS) fell by 0.47%, Deutsche Bank Harvest SSE 300 Index ETF (ASHR) rose by 1.16%. The FTSE A50 futures continued to rise in the night session by 0.66%, to 13975.00 points, rising by 1.3% at one point during the session.

• Among popular China concept stocks, fangdd network fell by 30.68%, li auto inc fell by 3.76%, Baidu fell by 2.48%, zeekr fell by 2.35%, netease fell by 1.12%, Nio Inc fell by 1.11%, Tencent ADR fell by 0.72%, Mengniu Dairy ADR fell by 0.68%, Vipshop fell by 0.54%, while Baidu rose by 0.01%, Alibaba rose by 1.29%, JD.com rose by 0.89%, New Oriental rose by 0.44%, PDD Holdings rose by 0.08%, Xpeng rose by 0.88%, Meituan ADR rose by 2.7%, and Trip.com rose by 2.29%.

• In other key individual stocks: (1) Domino's Pizza fell by 1.08% as the company's revenue growth fell short of expectations, but EPS exceeded expectations. (2) Delta Air Lines' US stock fell over 3% before closing down by 1.06%, as the company's third-quarter earnings missed expectations and fourth-quarter revenue guidance was weak.

European stocks opened higher but ended lower, with only the Italian stock index closing up. Insurance stocks rose by over 1.06% due to the impact of Hurricane Milton landing in Florida, while tech stocks fell by 1%, and auto stocks were under pressure due to increased competition. Glaxosmithkline reached a $2.2 billion settlement agreement in the Zantac case, resulting in a price increase of over 3%:

The STOXX 600 index in Europe fell by 0.18% to 519.11 points. The Eurozone STOXX 50 index fell by 0.25%. BMW's global deliveries in the third quarter decreased by 13% year-on-year. Mercedes-Benz's global sales in the third quarter decreased by 3% year-on-year.

Germany's DAX 30 index fell by 0.25%. France's CAC 40 index fell by 0.42%. Italy's FTSE MIB index rose by 0.43%. The UK's FTSE 100 index fell by 0.06%. Spain's IBEX 35 index fell by 0.72%.

Due to September's overall CPI and core CPI exceeding expectations, combined with the willingness of the Fed's Powell and Atlanta Fed President Bostic to pause rate cuts, the yield on the 10-year US Treasury bonds surpassed 4.10% in intraday trading, hitting a ten-week high:

• US Bonds: At the end of the session, the more interest rate-sensitive 2-year US Treasury yield fell by 4.96 basis points, to 3.9719%, trading between 3.9489% and 4.0914% during the session. The benchmark 10-year US Treasury yield rose by 0.20 basis points, to 4.0746%, trading between 4.0471% and 4.1158% intraday.

• Regan Capital's Chief Investment Officer Skyler Weinand stated that the attitude of Federal Reserve officials indicates that they are willing to let inflation exceed normal levels in order to achieve full employment. Only if the inflation rate rises to 4% or there are consecutive periods of excessively high inflation data will the Fed change its policy of continuing interest rate cuts next year.

• Eurozone Bonds: At the close, the yield on the 10-year German bund in the euro area fell by 0.1 basis points to 2.256%. The two-year German bund yield decreased by 2.7 basis points. The yield on 10-year UK gilts increased by 3.0 basis points and the two-year UK gilts yield decreased by 0.2 basis points. The yield on the 30-year UK government bond rose by 6 basis points to 4.78%, its highest level since May.

Expectations of a 25 basis points rate cut intensified, with the U.S. Dollar Index falling 0.06% in post-market trading, bidding farewell to near eight-week highs. The Japanese Yen and offshore Chinese Yuan rose, the Euro dropped to its lowest level since August 8th, the British Pound hit a one-month low, and Bitcoin fell over 2%, breaching the $0.06 million mark.

• U.S. Dollar: The DXY Dollar Index fell by 0.06% to 102.862 points, trading in a range of 102.720-103.178 points intraday.

• Bloomberg Dollar Index fell by 0.05% to 1243.84 points, trading in a range of 1242.07-1246.87 points intraday.

• Non-U.S. currencies had mixed performance: the Euro against the Dollar dropped by 0.02%, the Pound against the Dollar fell by 0.9%, and the Dollar against the Swiss Franc fell by 0.53%. Among commodity currency pairs, the Australian Dollar against the U.S. Dollar rose by 0.33%, the New Zealand Dollar against the U.S. Dollar rose by 0.49%, and the U.S. Dollar against the Canadian Dollar rose by 0.22%. As traders bet on the European Central Bank cutting rates next week, the options market indicates the Euro is set for its worst weekly performance since July.

• Japanese Yen: The Japanese Yen rose 0.49% against the US dollar, trading at 148.57 yen, with an intraday trading range of 149.55-148.30 yen. The Deputy Governor of the Bank of Japan stated that if the economic and inflation performance aligns with expectations, they will continue to raise interest rates accordingly.

• Offshore Renminbi (CNH): The offshore Renminbi rose 78 points against the US dollar at the close, trading at 7.0849 yuan, with an overall trading range of 7.0955-7.0683 yuan during the day.

• Most cryptocurrencies fell: The largest market cap leader, Bitcoin, fell 2.14% at the close, at $59,805.00, trading between $58,945.00 and $61,450.00 during the day. The second largest, Ethereum, fell 2.29% at the close, at $2,367.50, trading between $2,332.00 and $2,426.00 during the day.

Influenced by the tense situation in the Middle East and Hurricane "Milton", oil prices surged over 3.5%, breaking a two-day decline:

• US Oil: WTI November crude oil futures closed up $2.61, up 3.56%, at $75.85 per barrel. US oil continued to rise, extending gains after the close, reaching a high of almost 4.1% above $76.20.

• Brent Oil: Brent December crude oil futures closed up $2.82, up 3.68%, at $79.40 per barrel. Brent oil continued to rise, reaching a high of over 4.1% at $79.70 at the end of the session.

• On the news front: Hurricane Milton swept through Florida in the United States, causing about a quarter of the local gas stations to run out of gas and over 3.4 million households and businesses to lose power. Analysts at the energy consulting firm Ritterbusch and Associates stated that the widespread power outages, closures of multiple product terminals, delayed fuel truck deliveries, and interruptions in pipeline transportation may impact supply next week. According to CCTV News, Acting Secretary of Defense Christopher Miller stated that strikes against Iran would be 'deadly, precise, and unexpected,' keeping investors cautious.

• Natural Gas: US November natural gas futures fell by 2.12%, closing at $2.6750 per million British thermal units.

The weakening US labor market strengthening rate cut expectations, providing support for gold prices, with spot gold rising over 0.9% to surpass $2630 during the intraday session, ending a six-day decline. Spot silver rose over 2.2%, ending a three-day decline. London's industrial metals rebound across the board:

• Gold: COMEX December gold futures rose 0.81% to $2647.3 per ounce at the closing bell. Spot gold continues to rise, rising over 0.9% to surpass $2630 during the closing bell.

• Silver: COMEX December silver futures rose 2.1% to $31.375 per ounce at the closing bell. Spot silver continues to surge, with US stocks rising over 2.2% to nearly $31.20 at midday.

• London's base metals all rise: Copper, known as the 'Dr. Copper,' rose $48 to $9723 per ton. Lead in London rose by $4. Zinc increased by 2.19%. Aluminum rose by 1.77%. Tin increased by $322. Nickel rose by $170.

Editor/Lambor