U.S. and European stocks remained steady on Friday as investors await the latest influx of corporate earnings data and anticipate the Federal Reserve’s next policy move. While the Stoxx Europe 600 declined by 0.2%, the S&P 500, Nasdaq 100, and Dow Jones Industrial Average all remained relatively unchanged.
With inflation data for September coming in hotter than expected, traders are now anticipating the Federal Reserve’s next move, especially after introducing a half-percentage point cut in September. “The Fed said the last mile getting toward their inflation target is going to be tough, and that is what we are seeing,” David Donabedian from CIBC Private Wealth US observed.
Markets are pricing in an 80% chance that the Fed will cut interest rates by another 25 basis points at its November policy meeting. Despite hotter-than-expected September inflation figures, Fed policymakers, including Austan Goolsbee and John Williams, insist that interest rate cuts may still be able to continue despite an unexpected inflation rise.