The Consumer Price Index (CPI) report for November is out and with it comes the latest inflation data for the U.S. The all-items index increased by 2.7% year-over-year last month, as compared to a 2.6% increase in October. However, this is exactly what experts predicted would happen in November.
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Breaking down that CPI report, the Food index increased 2.4% year-over-year while the Energy index decreased 3.3% on the same basis. Excluding these two volatile items, inflation came in at 3.3% in November. That’s due to shelter jumping 4.7% compared to November 2023.
Shelter was also a major contributor to the 0.3% increase in the all-items index from October to November. It came in at 0.4% with food away from home also jumping by 0.4% alongside used vehicle prices climbing 0.6% during the month.
What this Means for the Next Federal Reserve Meeting
With inflation data meeting experts’ estimates, the majority of economists believe the Fed will cut interest rates by 25 basis points at the next meeting. Even so, predictions forecast the central bank will pause interest rate cuts after that, with none expected for January.
The next Federal Reserve meeting is set for Dec. 17 and Dec. 18. The Producer Price Index (PPI), which comes out tomorrow, is another key inflation metric that will be considered ahead of that meeting.
What Does This Mean for the Stock Market?
The stock market will likely be receptive to today’s inflation data as it matches estimates. While the slight rise may worry some, the increasing potential of an interest rate cut might outweigh those concerns. Investors will want to keep an eye on the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) for an overall feel of the market’s reaction.
Traders will also want to watch tech stocks as they are largely affected by interest rate news. Many of them fit into the growth stock category, which is highly susceptible to interest rates and inflation updates. A few examples to check in on today are Meta Platforms (META), Apple (AAPL), Nvidia (NVDA), Alphabet (GOOGL), and Advanced Micro Devices (AMD).
