The Mid-Day Buzz

Sophia Reyes · September 11, 2025 12:17 PM

September 11^th, 2025

Stocks Rise as Inflation Meets Expectations, Jobless Claims Tick Up

U.S. equities opened higher Thursday after fresh inflation and labor data largely matched forecasts. The consumer price index (CPI) rose to 2.9% year-over-year in August, up from 2.7% in July but in line with expectations. Health care and financial stocks are leading early gains, while communication services is the lone sector in the red.

The Dow Jones Industrial Average (^DJI) led stocks higher, rising over 1%, or around 500 points. The S&P 500 (^GSPC) rose over 0.6%, while the tech-heavy Nasdaq Composite (^IXIC) gained around 0.5%, on the heels of a muted but record-setting session on Wednesday.

Major indexes closed mostly higher Wednesday, with the S&P 500 setting another new record on support from mild wholesale inflation data.

Overseas, Japan’s Nikkei hit a record high amid mixed trading in Asia, while European shares advanced after the European Central Bank held its deposit rate at 2.0% as expected.

Economic Takeaways:

• Treasury yields are easing, with the 10-year at 4.0%, and the dollar is weakening against major currencies.
• WTI oil is slipping after several days of gains.
• Energy prices climbed 0.7% month-over-month in August, driven by a 1.9% increase in gasoline, helping to push headline inflation higher. Core CPI, which strips out food and energy, held steady at 3.1% in line with forecasts.
• Initial jobless claims rose to 263,000, defying expectations for a small decline to 231,000. Continuing claims held at 1.94 million, while the unemployment rate remains low at 4.3% and job openings have dipped slightly below the number of unemployed. These figures suggest the labor market is cooling from a position of strength.
• Futures trading indicated just 6% odds of a 50-basis point Federal Reserve rate cut next Wednesday, according to the CME FedWatch Tool.
• The European Central Bank left interest rates unchanged, noting inflation is near its 2% medium-term target and expected to dip below 2% by 2026–27. Growth forecasts were tweaked up to 1.2% for 2025 but down to 1% for 2026, underscoring sluggish European GDP that could weigh on U.S. firms with heavy exposure there.
• The Atlanta Fed’s GDPNow model nudged its estimate for third-quarter U.S. growth to 3.1% from 3%.
• Mortgage rates continued their descent this week, reaching an 11-month low, as investors reacted to softer-than-expected employment data and looked ahead to the Federal Reserve’s highly anticipated policy meeting. The average rate for a 30-year fixed mortgage fell to 6.35% in the week ending Wednesday, down from 6.5% just a week earlier, according to Freddie Mac. Meanwhile, 15-year fixed loans averaged 5.5%, a modest drop from 5.6%. Both figures mark the lowest levels observed since October 2024.

August CPI: Inflation Ticks Up Again, Putting Pressure on Household Budgets

Prices climbed faster in August, with the Consumer Price Index up 2.9% from a year ago and 0.4% from July. Food, fuel and housing led the gains, showing inflation’s persistence even as the economy slows.

Grocery prices rose 0.5% in August and 3.2% year over year. Coffee surged 3.6% on the month and is now almost 21% more expensive than last year. Ground beef costs 12.8% more than a year ago, while steak prices are up 16.6%. Eggs held steady at $3.59 a dozen but remain 10.9% higher annually. Eating out increased 0.3% from July.

Core inflation, which excludes food and energy, stayed at 3.1% annually and rose 0.3% month over month. Import-heavy categories such as cars, apparel and canned foods saw notable jumps, which some economists attribute to President Trump’s tariffs.

Housing costs rose 0.4% in August and 3.6% year over year. Used car prices were up 1% on the month and 6% annually. Gasoline prices ended their recent decline, rising 1.9% from July to an average of $3.19 a gallon nationwide, though still cheaper than a year ago. Airfares spiked 5.9% after a summer lull.

With inflation still above the Federal Reserve’s 2% target and the labor market softening, policymakers face a delicate decision at next week’s meeting. Markets widely expect a 25-basis-point rate cut, but rising prices may complicate the Fed’s longer-term strategy.

Sticky Inflation Likely to Allow Fed’s Rate Cut but Rules Out Larger Move Next Week

A stickier-than-expected inflation report is unlikely to derail the Federal Reserve’s plans for an interest rate cut next week, though it almost certainly rules out a larger “jumbo” reduction of half a percentage point.

The Consumer Price Index (CPI) for August showed that “core” prices—excluding volatile food and energy—rose 3.1% year over year, matching July’s pace and in line with market expectations. Month-over-month core inflation also held steady at 0.3%. On a headline basis, overall consumer prices climbed 2.9% in August, up slightly from 2.7% in July, with monthly gains at 0.4%, a touch above the expected 0.3%.

“Despite a slightly firmer gain in the core CPI in August amid broad increases in goods, services, and shelter prices, there was not much for the FOMC to fret about,” said Stephen Brown, economist at Capital Economics. “That cements the case for a 25-basis-point cut next week, rather than providing any support for a larger 50-basis-point move.”

The CPI data follows a report from the Bureau of Labor Statistics showing that wholesale prices unexpectedly fell in August. Businesses appeared to absorb higher costs rather than pass them on to consumers, squeezing profit margins.

Meanwhile, the labor market shows signs of softening. Initial jobless claims, a near real-time gauge of employment, jumped to 263,000, the highest level in four years. Government employment data for August showed the economy added only 22,000 jobs, well below economists’ expectations of 75,000, and the unemployment rate ticked up to 4.3% from 4.2%. Revisions also showed June job growth was negative at -13,000, while July’s gains were below trend, marking three consecutive months of slowing hiring.

These data points provide context for the Fed’s upcoming policy meeting on Tuesday and Wednesday. Markets are currently pricing in near-certainty for a 25-basis-point rate cut, reflecting expectations that the central bank will respond to softening labor market indicators and lingering economic risks.

Blockchain Lender Figure Valued at $7.6 Billion as Shares Soar in Nasdaq Debut

Figure Technology made a strong impression in its Nasdaq debut Thursday, with shares jumping 44% and pushing the company’s valuation to $7.62 billion. The surge continues a string of robust first-day performances by crypto-linked firms, signaling that digital-asset companies are increasingly moving toward the mainstream of financial markets.

The New York-based blockchain lender opened at $44 per share, well above its IPO offer price of $25. The offering itself was upsized, with Figure and some of its investors raising $787.5 million by selling 31.5 million shares—pricing above a previously increased range of $20 to $22 per share.

The debut comes during a particularly busy week for U.S. IPOs, the busiest since 2021. Record-high equity markets and renewed investor enthusiasm have encouraged a wave of new listings, following a lull in April caused by tariff-driven market volatility. Figure’s performance reflects both strong demand for innovative fintech platforms and broader optimism about blockchain-enabled financial services.

On the Move

• Adobe (ADBE) gained 1.9% in pre-market trading as investors positioned for its earnings release after the close. The stock has been under pressure this year amid concerns that the rise of AI-powered content creation tools could erode Adobe’s competitive edge.
• Kroger (KR) rose 2% after posting quarterly results this morning and raising its full-year outlook.
• Tesla (TSLA) stock gained roughly 4% Thursday, leading the “Magnificent Seven” Big Tech stocks.
• Oracle (ORCL) surged an extraordinary 36% Wednesday—its strongest single-day gain since 1992—after reporting a 360% jump in its order backlog, roughly four times Alphabet’s (GOOGL), according to Bloomberg Intelligence. The results fueled expectations that Oracle’s cloud growth could soon surpass Alphabet’s. Later, The Wall Street Journal reported Oracle and OpenAI had signed a $300 billion, five-year deal. Shares added another 1.5% in early Thursday trading.
• Oracle’s blockbuster update also powered chipmakers: the PHLX Semiconductor Index climbed 2.4% Wednesday, with Nvidia (NVDA) up more than 3.5% and Broadcom (AVGO) nearly 10%. Broadcom has now advanced more than 20% since last week’s earnings and 167% off its April low. Nvidia rose another 0.6% Thursday after DA Davidson upgraded the stock to Buy from Neutral.
• Amazon (AMZN) tumbled more than 3% Wednesday as investors worried Oracle could be stealing cloud share, a theme that also pressured Alphabet. Apple (AAPL) dropped 3% on disappointment with its product launch but edged higher in early trading Thursday even after two analyst downgrades citing lagging AI progress.
• Advanced Micro Devices (AMD) fell 1% pre-market after Erste Group cut its rating to Hold from Buy, saying operating income growth this year will likely trail 2024 levels.
• Utilities were a surprise winner Wednesday, climbing 1.7% as Oracle’s cloud-demand projections boosted enthusiasm for energy suppliers to data centers. Vistra Energy (VST), Constellation Energy (CEG), and NRG Energy (NRG) each jumped more than 5% Wednesday and extended gains Thursday morning.
• Bank of America analyst Ken Hoexter downgraded UPS (UPS) shares to an Underperform rating from Neutral and FedEx (FDX) stock to Neutral from Buy.
• Micron stock (MU) jumped roughly 8.5% Thursday morning to about $152, the biggest leap since April, when shares jumped roughly 19%. Thursday’s gain put the chipmaker on track for a record close. The gain came as Citi analyst Christopher Danely lifted his price target on shares to $175 from $150, maintaining his Buy rating on the stock.

What’s Ahead

On the earnings front, Adobe (ADBE) is on Thursday’s docket later today.

JPMorgan warned this week that the Federal Reserve’s decision on September 17 could trigger a sharp pullback in stocks as investors “sell the news.”

“This bull market feels unstoppable, with new support forming as former tent poles weaken,” wrote Andrew Tyler, head of global market intelligence at JPMorgan. However, he cautioned:

“We are concerned that the September 17 Fed meeting, which is expected to deliver a 25-basis-point cut, could become a ‘sell the news’ event. Investors may step back to reassess macroeconomic data, the Fed’s reaction function, potentially stretched positioning, a softer corporate buyback environment, and declining participation from retail investors.”