Record Highs Again for Three Major New York Stock Indexes as Inflation Falls Short of Expectations

On the 24th (local time), the three major New York stock indexes all hit record highs after the U.S. Consumer Price Index (CPI) growth rate came in below expectations.

On this day, the Dow Jones Industrial Average closed at 47,207.12, up 472.51 points (1.01%) from the previous session.

New York Stock Exchange view.

The S&P 500 Index ended at 6,791.69, up 53.25 points (0.79%), while the tech-heavy Nasdaq Composite Index finished at 23,204.87, up 263.07 points (1.15%) from the previous session.

All three major New York stock indexes closed at all-time highs. The latest inflation data released that day came in below expert forecasts, boosting investor sentiment.

The U.S. Department of Labor announced that the U.S. Consumer Price Index (CPI) for September rose 3.0% year-on-year. Although this was a higher increase than in August (2.9% year-on-year), it still fell short of market expectations.

After the CPI announcement, investors raised their expectations that the Federal Reserve will cut interest rates at both of its remaining meetings this year. According to the CME FedWatch Tool, the probability of a rate cut in December surged from 91% before the report to 98.5% after, and the probability of a rate cut next week remained above 95%.

Expectations that the Federal Reserve's monetary easing policy will lower credit risk led to a strong performance by major bank stocks such as JPMorgan Chase (up 2.0%), Wells Fargo (up 2.31%), and Citigroup (up 2.16%).

IBM rose 7.9% on reports that it could use AMD chips to run certain algorithms for the quantum computing technology it is developing, and AMD also gained 7.6%.

U.S. President Donald Trump announced the previous evening that he would suspend trade negotiations with Canada, citing an anti-tariff TV advertisement produced in Ontario, Canada. However, this had little effect on cooling investor sentiment.

Ryan Detrick, Chief Market Strategist at Carson Group, commented, "A benign CPI reading has opened the door for Federal Reserve rate cuts next week and in December, bringing good news on the inflation front."

President Donald Trump wrote on Truth Social, "The stock market is stronger than ever because of tariffs." In a separate post, he added, "Thanks to tariffs, our country is wealthy and strong again, and national security has been secured."