US Stocks Climb Before Latest Inflation Reading: Markets Wrap

(Bloomberg) — US stocks rose modestly as traders stayed cautious ahead of the latest inflation reading alongside a busy slate of corporate events spanning artificial intelligence and banking.

S&P 500 futures were up 0.2%. An exchange-traded fund tracking chipmakers signaled the sector’s five-day selloff was set to continue. ASML Holding NV advanced in Amsterdam on strong demand for its chipmaking gear. Europe’s regional Stoxx 600 index climbed 0.5%.

Bank of America Corp. fell more than 4% in early trading. The lender was hit with a $1.2 billion fine and missed revenue expectations in both fixed-income and equities trading. Morgan Stanley fluctuated after reporting results, rounding out earnings from major Wall Street banks. Meanwhile, Anthropic PBC is expected to meet investors as it prepares for a possible initial public offering.

Also in focus is the September inflation print, with forecasts pointing to a slowdown in the underlying reading from the previous month. Treasuries extended their rebound ahead of the data, with 10-year yields down one basis point to 5.20%. The dollar was little changed. Brent crude resumed gains as Iran-back Houthi rebels launched missile and drone strikes across Saudi Arabia.

“Headline inflation remains elevated, but as long as we don’t get something like 1.0% month-on-month, markets should be able to absorb the print quite well,” said Bank of New York Mellon strategist Geoffrey Yu. “The challenge is if core inflation is elevated.”

Bloomberg Economics expect headline inflation to accelerate to 0.6% on higher gasoline prices. The core likely rose 0.2%, compared to 0.3% the month before, balanced between growth in goods and services.

Money markets still price at least three quarter-point Federal Reserve interest-rate hikes over the next 12 months as oil prices remain elevated and the US economy stays robust. New York Fed President John Williams said Tuesday that he sees one hike this year as appropriate and no further tightening in 2027.

Meanwhile, the meeting between Anthropic and prospective investors will take on added importance at a time when questions are mounting over whether the vast sums being invested in AI can be sustained. The Claude-chatbot owner is at the center of public scrutiny over AI safety and faces increasing competition from US behemoths such as Alphabet Inc. and foreign rivals alike.

“The key number investors will be focused on is the annual recurring revenue figure as of the end of September,” said Chris Armstrong at Berenberg. “Investors will also want to see evidence of decent sequential growth in October. If the ARR number disappoints, we could see some AI related names sell off as a result.”

Corporate News:

BlackRock Inc. pulled in $205 billion of new money in the third quarter as revenue surged at the world’s largest asset manager, which is now a full year into a major transformation to push further into higher-fee private markets. Bank of America Corp.’s stock and fixed-income traders missed estimates as the bank’s results were also hurt by a charge tied to a regulatory penalty over money laundering and sanctions violations. Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd. will acquire a stake in IDBI Bank Ltd. for $5.6 billion, making it one of biggest foreign investment in India’s financial services sector. What Bloomberg Strategists Say:

““Core CPI is the next test, but with higher yields reflecting stronger potential growth, an upside surprise is more likely to cause an equity wobble than overturn the bullish thesis. A downside miss, meanwhile, could provide a positive catalyst.”

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 7:44 a.m. New York time Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average rose 0.3% The Stoxx Europe 600 rose 0.5% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1196 The British pound was little changed at $1.3264 The Japanese yen was little changed at 158.45 per dollar Cryptocurrencies

Bitcoin was little changed at $83,357.73 Ether fell 0.4% to $2,499.78 Bonds

The yield on 10-year Treasuries declined one basis point to 5.20% Germany’s 10-year yield was little changed at 3.47% Britain’s 10-year yield declined three basis points to 5.41% Commodities

West Texas Intermediate crude rose 1.8% to $95.80 a barrel Spot gold fell 0.5% to $4,139.80 an ounce This story was produced with the assistance of Bloomberg Automation.

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