Core Viewpoint - Investors are increasingly confident that the Federal Reserve will cut interest rates next month due to weaker-than-expected retail sales data [1][3]. Group 1: Market Reactions - Stock futures for the Dow Jones Industrial Average rose by 99 points, or 0.2%, while S&P 500 futures and Nasdaq 100 contracts both gained 0.3% [2]. - The three major indexes experienced a rally on Tuesday, with the Dow increasing by more than 660 points following economic data that supported the case for a rate cut at the Fed's upcoming policy meeting [3]. Group 2: Economic Indicators - Retail sales figures were reported weaker than expected, contributing to the market's anticipation of a rate cut [3]. - The producer price index increased in line with economists' forecasts, further influencing market sentiment [3].

Welcome back to Squawkbox. Rick Santelli here live at CME HQ with the breaking news of the morning. Finally, some real news.PPI producer price index for September. A bit late. Headline number coming in matching expectations of up 3/10.That would be the warmest since it was up 7/10 in July, which actually just a couple of months ago, at least based on this data. If we strip out uh the food and and add food and energy in, it becomes up one/10enth. That's cooler than expected.Up one/10enth would be the lightes ...

U.S. September PPI (Producer Price Index) YoY rose 2.7%, in line with expectations of 2.7% and up from the previous reading of 2.6%. ...

RT St. Louis Fed (@stlouisfed)The consumer price index tracks the prices of rent, insurance, imports and administrative fees, among other things. The producer price index tracks exports, government purchases, business investments and intermediate goods. Check the FRED Blog for more https://t.co/HfmiyMSLIS https://t.co/RNEXA4GwkE ...

Market Performance - The S&P 500 rose by 19.43 points or 0.3 percent to close at 6,532.04, while the Nasdaq increased by 6.57 points or less than a tenth of a percent to 21,886.06, both achieving new record closing highs [1] - The Dow Jones Industrial Average fell by 220.42 points or 0.5 percent to 45,490.92, impacted by declines in Apple, Salesforce, and Amazon [2] Economic Indicators - The Labor Department reported a 0.1 percent decrease in the producer price index for final demand in August, following a revised increase of 0.7 percent in July [3] - The annual rate of producer price growth slowed to 2.6 percent in August from a revised 3.1 percent in July, surprising economists who expected a rise [3][4] Federal Reserve Outlook - The unexpected decrease in producer prices has led to increased optimism regarding a potential quarter-point interest rate cut by the Federal Reserve, with a 92.1 percent chance indicated by CME Group's FedWatch Tool [4] Company Highlights - Oracle shares surged by 36.0 percent after reporting slightly weaker than expected fiscal first-quarter earnings but projecting cloud infrastructure revenue to grow to $144 billion by fiscal 2030 from $10.3 billion in fiscal 2025 [5] Sector Performance - Semiconductor stocks saw significant gains, with the Philadelphia Semiconductor Index rising by 2.4 percent to a record closing high, driven by strong revenue growth from Taiwan Semiconductor [7] - Gold stocks also performed well, with the NYSE Arca Gold Bugs Index increasing by 2.2 percent as gold prices reached a new record closing high [7] - Oil service, natural gas, and utilities stocks experienced notable strength, while retail and biotechnology stocks also moved upward [8] International Markets - In the Asia-Pacific region, stock markets generally moved higher, with Japan's Nikkei 225 Index up by 0.9 percent and Hong Kong's Hang Seng Index rising by 1.0 percent [10] - European markets showed mixed results, with the French CAC 40 Index up by 0.2 percent, while the U.K.'s FTSE 100 Index and the German DAX Index fell by 0.2 percent and 0.4 percent, respectively [10] Bond Market - Treasury yields decreased, with the benchmark ten-year note yield falling by 4.2 basis points to a five-month closing low of 4.032 percent [11]

Bitcoin Price Gets a Boost from Producer Price Index Print► https://t.co/I30ZdnJYlm https://t.co/I30ZdnJYlm ...

Economic Indicators - The Bureau of Labor Statistics reported a 0.1% drop in the producer price index (PPI) for August, indicating reduced pressure on producers to raise prices, which increases the likelihood of a Federal Reserve rate cut next week [1] - The core PPI, excluding food, energy, and trade, rose by 0.3% month-over-month, the fastest pace since March, bringing the year-over-year core rate to 2.8%, suggesting persistent underlying price pressures despite subdued goods inflation [4] Cryptocurrency Market Reaction - Bitcoin (BTC) gained approximately 0.5% in the hour following the release of the new U.S. economic data, trading over $114,000, which is 2.3% higher than the previous week but still 5.7% below its price 30 days ago [2] - Ethereum also saw a slight increase of 0.2%, trading at $4,382.10 after the PPI announcement [2] Market Sentiment and Predictions - Users on Myriad, a prediction market, show increased confidence that Bitcoin can remain above $105,000 throughout September, with 72% of users believing in this price stability [3] - The Crypto Fear & Greed Index has shifted from a greed reading of 70 to a neutral rating of 49, indicating a change in market sentiment [6] Federal Reserve Expectations - With the Federal Open Markets Committee (FOMC) meeting approaching, there is a strong expectation (88%) among investors for a 25 basis point rate cut, while 12% anticipate a 50 basis point cut [7] - Upcoming economic indicators such as non-farm payrolls and unemployment data are expected to significantly influence market volatility and crypto prices [7]

Core Insights - U.S. producer prices unexpectedly fell in August, indicating that domestic firms may be absorbing some of the tariffs on imports [1][2] - The lack of strong producer price pressures suggests softening domestic demand amid a struggling labor market, leading to expectations of an interest rate cut by the Federal Reserve [2][3] Producer Price Index (PPI) Trends - The Producer Price Index for final demand decreased by 0.1% in August, following a downwardly revised increase of 0.7% in July, contrary to economists' expectations of a 0.3% rise [3][4] - A 0.2% drop in services prices contributed to the PPI decline, primarily due to a 1.7% decrease in margins for trade services [4] Retailer Pricing Strategies - Retailers appear to be absorbing tariff costs, as indicated by commentary from second-quarter earnings reports, although they may need to start selectively increasing prices in the future [5] - The cost of services excluding trade, transportation, and warehousing rose by 0.3%, while transportation and warehousing services prices increased by 0.9% [5] Goods Price Movements - Goods prices edged up by 0.1% after a 0.6% increase in the previous month, with food prices also gaining 0.1% [7] - Significant price increases were noted in wholesale beef (up 6.0% month-over-month and 21.1% year-over-year) and coffee (up 6.9% month-over-month and 33.3% year-over-year) [7]

Inflation Analysis - The producer price index (PPI) increased significantly from approximately 23% to 33% year-over-year, a full percentage point increase, exceeding market expectations of 25% [3][4] - The consumer price index (CPI) saw a smaller increase, rising from 267% to about 273% [3] - PPI measures inflation upstream at the production or wholesale stage, while CPI measures it downstream at the consumer level [6][7] - While upstream prices are increasing, it remains to be seen if these costs will be passed on to consumers and reflected in CPI [8][9] - Food and beverage inflation remained relatively stable, while housing inflation decreased, masking increases in other categories such as medical care and recreation [17][18][19] - Housing inflation accounts for approximately two-thirds of overall CPI [20] Market Impact and Monetary Policy - The surge in PPI caused market sell-offs, particularly around 8:30 AM when the data was released [17][33] - Despite the PPI increase, the market still anticipates a rate cut in September, with approximately a 90% probability, although this was previously higher at 97% or 98% [23] - The report suggests that even with a rate cut, the long end of the yield curve may increase due to inflation concerns [24] - Cutting rates with rising inflation may not improve the housing market and could potentially worsen it [27] Consumer Behavior - Sales are declining at some stores like Chipotle, Cava, and Sweetgreen, indicating that consumers may be unwilling to pay higher prices [10][11][13][14] - Lower-end pizza chains are experiencing increased demand, suggesting consumers are seeking more affordable options [12][15]

Inflation Indicators - Producer Price Index (PPI) headline number increased by 09% [1] - Core PPI, excluding food and energy, also rose by 09%, matching the increase in June 2022 [1] - PPI excluding food, energy, and trade exceeded expectations, rising by 06% against an expected 02% increase, marking the highest level since March 2022 [2] - Final demand year-over-year increased by 33%, surpassing the expected 25% and reaching the highest level since February [3] - PPI excluding food, energy, and trade year-over-year increased by 28%, exceeding the expected 25% and reaching the highest level since March [3] - PPI excluding just food and energy year-over-year increased by 37%, the largest increase since March when it was 39% [3] - Every PPI metric is warmer than expected and significantly higher sequentially [4] Labor Market - Initial jobless claims decreased by 3000 to 224000 [4] - Continuing claims remained above 19 million for the 12th consecutive week, totaling 1953000, a level last seen in November 2021 [4] - The next increase in continuing claims will push the total over 2 million, a level last seen in November 2021 at 2041000 [5] Bond Market - Interest rates on the 10-year Treasury note moved up to around 425% [5] - The 2-year Treasury note yield increased to 370%, with yields higher across all maturities except for 30-year bonds, which remained virtually unchanged [5]