Another day, another record stock market. Both the S&P 500 and the Dow hit all-time highs on the eve of the final inflation report before the presidential election.

For the S&P 500, Wednesday marked its 44th record of 2024.

September CPI is due at 8:30 a.m. ET today — today’s edition covers everything you want to know.

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CPI won’t matter

The latest inflation data might move markets but it won’t change how the Federal Reserve adjusts interest rates at the November policy meeting.

September’s Consumer Price Index reading is expected to rise 2.25% compared to one year ago, according to Cleveland Fed estimates. In August, that hovered at 2.5%.

Meanwhile, Core CPI, which strips out food and energy, is seen hitting 3.11% year-over-year.

Three details to note: 

• If the headline estimate holds, it’d be the lowest rate since February 2021

• Inflation has clocked in below consensus expectations four months in a row

• Over the last 60 months, CPI has come in lower than expected 33% of the time, per FactSet

What’s unique about the September data is that most forecasters don’t see it having a meaningful impact on monetary policy.

The Fed remains focused instead on the job market, which has weakened over recent months. 

“We anticipate [projected CPI] will be neither weak nor strong enough to change consensus view for a 25bps cut in November,” Bank of America analysts wrote in a note, adding that declining energy prices should translate to a softer headline print.

Similarly, here’s what Vanguard economist Josh Hirt had to say: 

“Although inflation remains elevated, we do not see a material effect on the Fed’s trajectory of rate cuts.”

Regardless of what inflation tells us, the case for a second jumbo rate cut from the Fed has all but evaporated.

In its place has come chatter of what some market watchers have coined “no cut November.” 

Traders have ramped up bets for the Fed to keep interest rates unchanged next month, according to CME data. Odds have jumped from zero to 24% over the last week.

The last time the central bank delivered a half-point rate cut and then held rates steady at the following meeting was 2002, according to Bank of America.

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Elsewhere:

🏦 Fed minutes point to a policy debate. Central bankers were divided at the September FOMC meeting on whether to go big or small on the first rate cut in four years, the minutes showed Wednesday. A “substantial majority” of officials supported a jumbo cut, but “some” said they preferred a 25-basis-point move. (Yahoo Finance)

👀JPMorgan’s CEO is flirting with politics. Jamie Dimon has reportedly been speaking regularly to both Trump and Harris’ campaigns. He has sent signals publicly and privately that have been embraced by both sides, though he hasn’t yet endorsed anyone: “I will decide, and I will vote.” (Bloomberg)

🚗Tesla’s Robotaxis arrive. Elon Musk’s company will host a closely-watch event today that could reveal a glimpse into the future of self-driving cars and artificial intelligence. For traders, volatility on Tesla stock options remain high this week, and prices could swing depending on how the event unfolds. (Interactive Brokers)

Rapid-fire:

• Hurricane Milton is bearing down on Florida and damages could cost as much as $175 billion in Tampa (Barron’s)

• “Catastrophe bond” investors are staring down big losses amid back-to-back hurricanes (Business Insider)

• Argentina president Javier Milei said he isn’t ready to lift the country’s currency controls and he’s still trying to get inflation lower (FT)

• This week marks the official two-year birthday of the current bull market and stocks are up over 60% (Carson Research)

• Palantir stock soared Wednesday more than 4% to hit a new record high (Barron’s)

• A strategist at JPMorgan who’s one of Wall Street’s biggest bears is turning bullish on stocks for the first time in two years (Business Insider)

Last thing:

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