Wall Street Cheers Rate-Cut Hopes Despite Inflation Spike

​Record Highs, Rising Worries
All three major U.S. indexes hit all-time highs, even as August inflation came in hotter than expected. Prices climbed 0.4% month-on-month, pushing the annual rate to 2.9%. Tariffs — courtesy of Trump’s trade war — look to be adding fuel to the fire.

Jobless Claims Soar
While prices heat up, jobless claims just hit their highest level in nearly four years. That’s why investors are shrugging off inflation fears and leaning harder into the “Fed will cut rates” narrative.

Fed Cut Almost a Lock
“Today’s CPI report has been trumped by the jobless claims report,” wrote Seema Shah, chief strategist at Principal Asset Management. Markets now expect at least a 25-basis-point cut at next week’s Fed meeting, though all eyes will be on Jerome Powell’s tone.

Japan Gets a Cut of U.S. Profits
In trade news, Commerce Secretary Howard Lutnick announced the U.S. will share returns with Japan on $550 billion worth of Tokyo’s investments in American projects — a sweetener in their trade deal.

China Warns Mexico
Meanwhile, Beijing told Mexico to “think twice” about its plan to hike tariffs on Asian cars to 50% from 20%. The move risks stirring up another trade flashpoint.

Meme Stocks on Watch
JPMorgan flagged four meme stocks it says are dangerously exposed to wild price swings. With retail traders piling in and hedge funds shorting, expect volatility fireworks.

Asian Tech Joins the Rally
Asian tech names like Alibaba, Baidu, and SK Hynix rode the AI and chip boom Friday, extending Wall Street’s optimism across the Pacific.

The Bigger Picture
​Hot inflation isn’t being ignored — but it’s being overshadowed. With weak labor data and global trade tensions swirling, the market is betting the Fed will step in to keep the rally alive.