Wall Street surged to fresh record highs on Monday after US inflation rose by less than expected last month, boosting hopes that the Federal Reserve will begin cutting interest rates.
US inflation eased to 3% in September, compared with forecasts of a higher print, prompting renewed optimism among investors. The data helped lift all three major US indices at the opening bell.
The Dow Jones Industrial Average climbed 265 points (0.57%) to 46,999, while the S&P 500 gained 0.8% and the tech-heavy Nasdaq rose around 1%, with both indices hitting new record highs.
Nathaniel Casey, investment strategist at Evelyn Partners, said the inflation report supports expectations of rate cuts:
“The latest US inflation report surprised to the downside… Core inflation eased while headline inflation rose only modestly, suggesting price pressures remain contained. Markets continue to price in 25bps cuts at both the October and December Federal Reserve meetings.”
Despite ongoing uncertainty linked to tariff impacts, analysts say the overall inflation trend remains consistent with the Fed’s easing path, especially with signs of softening in the labour market.
