Thursday, October 15

September CPI came in at 3.7% year over year, above the 3.6% forecast, while core PPI rose 0.7% month over month—more than twice expectations and its largest gain in four years. The data pushed fed funds futures to an 88% probability of at least a quarter-point December hike, making near-term easing a harder case to sustain.

Equities told a more divided story than the headline indexes suggested. The Dow rose 1.1%, helped by Nike, Salesforce, and Home Depot, while the S&P 500 and Nasdaq barely advanced after recovering from weaker openings. Semiconductor pressure and a 12% five-session drop in Korea’s KOSPI underscored the sharper technology retreat. Bank of America also fell nearly 5% after a $1.2 billion regulatory penalty weighed on earnings. Yet the 10-year Treasury yield dropped nine basis points to about 5.09%, an unusual counterpoint to hotter inflation that points to a safety bid rather than a straightforward rate repricing.

Houthi attacks on Saudi Arabian energy facilities sharpened concern about disruption to regional oil infrastructure. WTI climbed 2.7% to $97.65 a barrel, while Brent slipped 0.2% but remained elevated at $105.85. The divergence suggests the geopolitical premium was not expressed uniformly across benchmarks, but the level of Brent keeps supply risk prominent.

ECB President Christine Lagarde said the Middle East war was putting “huge strain” on oil and gas movement and supply; Russia’s war in Ukraine was also pressuring refinery capacity. Gold rose about 1.4% to $4,168.50, while Treasury yields fell and the dollar index declined 0.5%. Those cross-asset moves fit a market contending with energy disruption alongside the inflation shock: persistent supply pressure could complicate the path back to lower inflation even as safety demand weighs on yields.