CPI Friday — never a dull one. Coffee number two, report in hand, and we’ve got a lot to unpack. Inflation cooled slightly, but it’s not dead. Services are still sticky, housing’s still a mess, and energy’s on fire. In short — the Fed’s in the corner, the market’s euphoric, and the Russell just won’t quit.
Key Takeaways
Inflation cooled, but not enough
- Monthly CPI rose 0.3%, down from 0.4% — a mild win, but the wrong kind of sticky remains.
- Shelter and services are still hot; the Fed can’t fix zoning laws or housing supply with rate cuts.
Energy is the headline
- Gasoline jumped 4.1% in September, with WTI up to $62 and Brent to $66.
- Sanctions on Russia and steady demand are keeping this trade alive — the energy complex remains the cleanest momentum setup on the board.
The Fed’s quietly surrendering the 2% dream
- Powell once said we’d hit 2% by 2025 — now it’s 2027.
- Consensus forming around 3% inflation as “good enough.” Expect cuts, not panic.
Growth stocks back in play
- Slower inflation = stronger tech. Nvidia, semis, and crypto names all waking up.
- Watch for rotations — AI momentum is back, and the leverage game is heating up again.
Bond market breathing
- Core CPI slowdown hints at a relief rally for duration trades.
- Dollar’s mixed, but equities and growth favor the softer inflation tone.
What I’m Watching
The key today is whether the CPI relief sticks through the session. Watch the DXY, TLT, and 10-year yield for confirmation. Semiconductor names (SMH, NVDA, INTC) are retesting breakouts, while energy and real estate continue to lead on momentum. The short squeeze basket is alive — think RIOT, HIVE, and even the occasional Beyond Meat surprise. Volume-weighted average price (VWAP) reversions are going to be the intraday tell; stay nimble, especially with weekly options.
Markets are euphoric because they want to be. Liquidity is still king, and until it dries up, this game keeps running. Just remember — equilibrium never lasts long.
Until next time,
Garrett Baldwin
TheoTRADE