In a significant turn for investors, all three major U.S. stock indexes achieved all-time highs, propelled by recent inflation and labor data. While the Consumer Price Index (CPI) for August exceeded expectations, the surge in jobless claims created a sense of optimism regarding anticipated interest rate cuts. The annual inflation figure aligned with forecasted expectations despite the monthly increase. Notably, jobless claims reached multiyear highs—although analysts suggest this spike may have been influenced by disturbances in Texas and the timing of the Labor Day holiday.
The downward movement of the closely watched 10-year U.S. Treasury yield further fueled the momentum in equity markets. Market expectations for a quarter-percentage point interest rate cut at the upcoming Federal Reserve meeting remain firmly at 100%, underscoring the prevailing bullish sentiment. Globally, stock benchmarks mirrored the U.S. trend, reaching record highs.
On the regulatory front, U.S. Treasury Secretary Scott Bessent has been engaging potential candidates to succeed Jerome Powell as Chair of the Federal Reserve. Former Fed officials, including Lawrence Lindsey, Kevin Warsh, and James Bullard, have reportedly met with Bessent, who plans to interview current Fed members only after the upcoming meeting’s blackout period concludes. Concurrently, Fed Governor Lisa Cook is facing potential removal, as former President Trump is appealing to an appeals court to facilitate her dismissal prior to the Federal Open Market Committee meeting next week.
In corporate news, shares of Warner Bros. Discovery experienced a remarkable surge, rising 28% amid speculation that Paramount Skydance may pursue a bid for the company. Although no formal offer had been made by the deadline, a successful bid could dramatically reshape Paramount’s portfolio and complicate Warner Bros. Discovery’s plans for a potential spinoff.
The initial public offering (IPO) market is also heating up. Crypto exchange Gemini has priced its shares at $28, exceeding initial expectations ahead of its public debut on the Nasdaq under the ticker “GEMI.” Gemini, founded by the Winklevoss twins in 2014, aims to gauge investor interest in the crypto sector, following the successful listings of other companies in the field. This pricing comes shortly after Klarna’s shares surged on their first trading day, indicative of robust demand in the IPO market.
Lastly, Opendoor, a prominent meme stock, captured market attention with a leadership overhaul, sending shares soaring nearly 80%. The real estate technology firm has appointed Shopify executive Kaz Nejatian as its new CEO and reinstated co-founder Keith Rabois and former CEO Eric Wu to its board. The stock, which faced serious challenges earlier in the year, has now rallied over 550% this year, closing above $10.
This week has been undeniably eventful, marking several pivotal developments across various sectors.
