Market summary today: U.S. stocks decline as the dollar, gold, oil, and bonds rise.

Risk appetite saw significant variation in global markets during trading on Thursday following the release of inflation data in the United States, after the minutes of the Federal Open Market Committee meeting were released yesterday, and with the onset of the quarterly earnings announcement season for companies.

Data from the Labor Department showed that the Consumer Price Index rose more than expected in September, with consumer prices increasing by 2.4% compared to the same month last year, a slight slowdown compared to the August reading of 2.5%. This increase, the lowest since February 2021, was higher than economists' expectations of 2.3%.

At the same time, U.S. unemployment claims rose last week to their highest level in over a year, amid significant increases in Michigan and job losses resulting from Hurricane Helen.

The data helped bolster expectations for a smaller rate cut by the Federal Reserve next month, with the CME's FedWatch tool indicating that markets expect a 87.1% chance of a 25 basis point cut, up from 80.3% yesterday.

On the other hand, the People's Bank of China announced that it is starting to inject credit facilities worth 500 billion yuan to stimulate capital markets, a plan previously announced at the end of September as part of a series of stimulus measures announced by China.

Stock Market

The global stock market index MSCI fell for the first time in three sessions after the release of U.S. inflation data, amid clear losses for U.S. stock indexes and European stocks, in contrast to Japanese and Chinese stocks.

U.S. Stocks

While Wall Street did not view today's economic numbers as catastrophic, they certainly added to the discussions about the next steps the Federal Reserve may take.

The Dow Jones Industrial Average fell by about 112.78 points, or 0.26%, to 42,402.45 points, while the S&P 500 dropped by about 10.15 points, or 0.19%, to 5,771.02. The Nasdaq Composite also fell by 5.6 points, or 0.09%, to 19,989.82 points, following both the Dow Jones and S&P 500 closing at record highs on Wednesday.

Most major sector indices declined, although energy stocks rose on the back of oil profits, and shares of major companies showed mixed performance, with Nvidia rising and Apple falling, while Tesla’s stock remained stable as investors awaited the launch of the company’s fully self-driving car later today.

European Stocks

The German DAX index fell by 0.23% at the closing bell, with Rheinmetall’s shares down by 3.68%. The French CAC 40 index fell by 0.24% with Teleperformance down by 2.76%. The Euro Stoxx 50 index declined by 0.25%, with German Deutsche Post losing 2.34%. The UK’s FTSE 100 lost 0.7% following a 4.94% drop in Taylor Wimpey’s stock.

Asian Stocks

Unlike stocks in the U.S. and Europe, Asian stocks rebounded, with Japan's Nikkei 225 rising by 0.26% to close at 39,380.89 points, while the broader Topix index rose by 0.2% to close at 2,712.67 points.

At the same time, the Chinese mainland CSI 300 index closed up 1.06% at 3,997.78 points, while the Hang Seng index in Hong Kong rose by 3% at the close.

The rebound in Chinese stocks came after the market's ascent was interrupted on Wednesday, with the CSI 300 index cutting a ten-day winning streak to drop by 7%, a rise that had occurred as a result of a series of government stimulus measures at the end of September.

Bond Market

Traders in the bond market increased bets that the U.S. Federal Reserve will slow the pace of cuts to 25 basis points at the November meeting.

The yield on the benchmark U.S. 10-year Treasury bond rose by 2.9 basis points to 4.096%, while the yield on the two-year Treasury bond, which typically moves in alignment with interest rate expectations, fell by 2.6 basis points to 3.991%.

This comes after U.S. Treasury bonds had earlier recorded their highest levels since late July, following a rise of more than 20 basis points last week, largely due to stronger-than-expected payroll data on Friday.

In Europe, the new French government is set to present its 2025 budget later today, with plans for a €60 billion tax increase and spending cuts to address the rising fiscal deficit, while the closely monitored gap between French and German government bonds—a gauge of investor demand for a premium on holding French debt—steadied at 76 basis points.

Forex Market

The dollar index, which measures the performance of the U.S. currency against a basket of 6 major currencies, rose by 0.13% to 103.01 points, while the euro fell against the dollar by 0.21% to $1.0919, and the British pound retreated against the U.S. dollar by 0.28% to $1.3048.

Against the Japanese yen, the dollar fell by 0.42% to 148.66 points, after Bank of Japan Deputy Governor Ryozo Himino stated this morning that the central bank would consider raising interest rates if it had “greater confidence” in achieving its economic and price forecasts.

Commodity Markets

Oil

Oil prices rose after two sessions of decline, supported by increased demand for fuel with Hurricane Milton making landfall in Florida, on one hand, and the start of Chinese stimulus measures on the other hand, while also focusing on potential supply risks from the Middle East.

Brent crude futures rose by 3.61% to $79.59 a barrel, while U.S. West Texas Intermediate futures increased by 3.70% to $76.03 a barrel.

Gold

Gold prices rose today after four sessions of losses, as investors monitored potential escalations in the Middle East and preferred safe-haven investments, even though they do not yield returns.