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Stocks notch new highs ahead of Fed week
The three main indexes finished at record highs on Friday. At the close, the Dow Jones Industrial Average was up 1.0% at 47,207, the S&P 500 was 0.8% higher at 6,791, and the Nasdaq Composite had gained 1.2% to 23,204.
Over in the bond market, the 2-year Treasury yield slipped 2 basis points to 3.48% and the 10-year Treasury yield ticked up 8 basis points to 3.997%, both near their lowest level of the past 12 months.
– Karee Venema
It’s a big week ahead for Wall Street
Next week will be a busy one on Wall Street. In addition to the Fed meeting, market participants will also have a jam-packed earnings calendar to sift through.
Among the most notable names reporting are Alphabet (GOOGL) on Wednesday evening, and Amazon.com (AMZN) and Apple (AAPL) after Thursday’s close.
“So far, Q3 results are off to a good start – S&P 500 earnings are up around 9% year over year, marking the ninth straight quarter of growth, the longest streak since 2018,” says Raymond James Chief Investment Officer Larry Adam. “Plus, 82% of companies are beating EPS estimates – the best showing since Q3 2023.”
Additionally, President Donald Trump is scheduled to talk with Chinese President Xi Jinping on Thursday ahead of the APEC summit in South Korea. Trade tensions between the two countries have escalated in recent weeks, though Adam notes that this appears to be posturing ahead of the November 10 trade deadline.
“Neither side wants to look weak, but neither wants a repeat of the turmoil earlier in the year,” Adam says. “While it’s unrealistic to expect the Trump-Xi meeting to resolve all issues, even a shift toward calmer rhetoric could help move negotiations forward.”
– Karee Venema
Wall Street shouldn’t expect a half-point rate cut anytime soon
Today’s mostly benign inflation report for September should make the Federal Reserve more comfortable with cutting short-term interest rates by another quarter-point at their policy meeting on October 29.
Although September employment data has not been published because of the ongoing federal government shutdown, the Fed will assume that the labor market weakness shown in the August report is continuing, which justifies a rate cut.
It seems likely that the Fed will also cut by a quarter point at its December 10 meeting before pausing. However, those who are expecting a half-point cut at either of these two meetings are likely to be disappointed.
Read more: Kiplinger Inflation Outlook: Stable for Now, but With Signs of Increasing Tariff Pressure
– David Payne
David Payne
David is both staff economist and reporter for The Kiplinger Letter, overseeing Kiplinger forecasts for the U.S. and world economies. Previously, he was senior principal economist in the Center for Forecasting and Modeling at IHS/Global Insight, and an economist in the Chief Economist’s Office of the U.S. Department of Commerce.
Expect more rate cuts in 2026, says BMO
The September CPI report all but locks in quarter-percentage-point rate cuts in both October and December, says Douglas Porter, chief economist at BMO Financial Group.
“Looking a bit further ahead into 2026, we suspect that the near-absence of serious tariff-related inflation sets the stage for additional cuts,” the economist adds. “After all, core goods prices, the very area one would expect tariffs to affect, rose a moderate 0.2% last month and 1.5% in the past year. True, that’s up from essentially no inflation in this category in the decade up to 2020, but it’s not the shape-shifting pace that many analysts expected in the wake of double-digit tariffs.”
Porter adds that moderating shelter inflation – it rose just 0.2% on a monthly basis in September after a 0.4% rise in August – should have headline and core inflation averaging annual increases of just below 3% next year.
As such, he’s expecting an additional 75 basis points of rate cuts in 2026, bringing the federal funds rate south of 3% when all is said and done.
– Karee Venema
Fed meeting schedule for 2025 and 2026
The next Fed meeting, which runs from October 28 to October 29, marks the seventh gathering of 2025. That means there’s one more to go after that.
“The committee meets eight times a year, or about once every six weeks,” writes Kiplinger contributor Dan Burrows in his feature, “When Is the Next Fed Meeting?“.
The Federal Open Market Committee “is required to meet at least four times a year and may convene additional meetings if necessary,” Burrows adds, noting that “the convention of meeting eight times per year dates back to the market stresses of 1981.”
Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair’s press conference at 2:30 pm.
Here is the full Fed meeting schedule for 2025:
- January 28 to 29
- March 18 to 19
- May 6 to 7
- June 17 to 18
- July 29 to 30
- September 16 to 17
- October 28 to 29
- December 9 to 10
And here’s the full Fed meeting schedule for 2026:
- January 27 to 28
- March 17 to 18
- April 28 to 29
- June 16 to 17
- July 28 to 29
- September 15 to 16
- October 27 to 28
- December 8 to 9
– Karee Venema
September CPI comes in lighter than expected
The September Consumer Price Index showed that President Donald Trump’s tariff policies have had a muted impact on cost pressures – and all but guarantees the Federal Reserve will lower the federal funds rate on Wednesday afternoon.
According to the Bureau of Labor Statistics, headline CPI was up 0.3% month over month in September, slower than the 0.4% rise seen in August and the 0.4% increase economists expected.
The CPI was 3.0% higher year over year, a quicker pace than the month prior. Still, the results arrived below the 3.1% increase economists anticipated.
Gas prices were the biggest contributor to the increase in headline CPI, surging 4.1% from August to September. Food costs were also up last month, rising 0.2%.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, rose 0.2% month over month and 3.0% year over year – coming in below August’s figures and economists’ forecasts.
“Inflation might not be slowing, but it’s not surprising to the upside anymore,” says David Russell, global head of market strategy at TradeStation. “The details are positive, with shelter and transportation services moderating. Some key parts of the basket are cooling even if tariffs nudge items like apparel higher.”
Russell adds that the September CPI report keeps the Fed on track to cut rates by a quarter-percentage point at next week’s meeting, and will likely have policymakers striking a more dovish stance moving forward.
While delayed from its originally scheduled October 15 reporting date, the BLS released today’s data so that the Social Security Administration could calculate the cost-of-living adjustment (COLA). But with data collection services still suspended, it’s unclear when we’ll see the next CPI report.
– Karee Venema
Karee Venema
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021, and oversees a wide range of investing coverage, including content focused on equities, fixed income, mutual funds, ETFs, macroeconomics and more.
