Wall Street experienced volatility on Tuesday as investors assessed a wave of delayed economic indicators released after the recent U.S. government shutdown. The Dow Jones Industrial Average climbed approximately 550 points, or 1.19%, during early trading, while the S&P 500 advanced 0.72% and the Nasdaq gained 0.41%. Market movements were largely influenced by speculation over whether the Federal Reserve will reduce interest rates at its upcoming policy meeting.
Recent comments from several central bank officials have hinted at a willingness to lower borrowing costs, boosting investor confidence. Traders are now assigning an over 80% probability to a rate cut in December, according to CME FedWatch data. Despite this optimism, the technology sector faced headwinds, with Nvidia shares dropping around 3% after reports emerged that Meta might source AI chips from Alphabet.
Key data releases included September’s retail sales and the Producer Price Index (PPI), both delayed due to the federal funding lapse. The shutdown disrupted data collection across statistical agencies, creating a backlog that continues to affect the timely release of economic reports. As a result, full October data for critical indicators like the jobs report and Consumer Price Index (CPI) will not be published separately but will be combined with November’s figures.
The September PPI revealed a 0.3% monthly increase in wholesale prices, maintaining an annual inflation rate of 2.7%. Notably, the core index—excluding food and energy—rose just 0.1% for the month, marking a 2.6% year-over-year gain, the lowest since July 2024. This came in below economists’ expectations of a 0.3% monthly rise and a 2.7% annual rate, based on FactSet consensus.
While PPI does not directly mirror consumer inflation, sharp increases in gasoline, food, and electricity prices could signal further pressure on household budgets. Energy costs alone accounted for roughly two-thirds of the monthly rise in goods prices, with additional increases seen in meats, residential power, and motor vehicles.
Consumer sentiment, however, showed signs of strain. The Conference Board’s latest survey recorded a drop in consumer confidence to 88.7, the weakest level since April, when former President Donald Trump introduced broad tariffs. Concerns over inflation, trade policy, and the recent government closure dominated public feedback. Expectations for job availability and income growth over the next six months also deteriorated.
Despite high-profile layoffs in recent weeks, the unemployment rate remained low at 4.4% in September. Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, observed that some businesses appear to be absorbing tariff-related cost increases rather than passing them fully to consumers. The trade services category, which reflects profit margins for retailers and wholesalers, fell 0.2% in September, following a 1.7% decline in August.
Sector performance varied significantly. Auto retailers and sellers of sporting goods, clothing, and jewelry saw reduced margins, potentially shielding customers from price hikes. In contrast, electronics, furniture, and flooring retailers—areas heavily dependent on imports—passed on nearly all cost increases, leading to wider profit margins.
Housing data offered a more positive outlook. Pending home sales rose 1.9% in October, reaching their highest level since November 2024, according to the National Association of Realtors. The Midwest led with a 5.3% monthly increase, attributed to better affordability, while the West saw a decline. Lawrence Yun, NAR’s chief economist, noted that seasonal market trends typically favor buyers during the holiday months due to longer listing durations.
Mortgage rates, which have trended downward since May, hit a 2024 low in late October before edging up slightly. Meanwhile, home price growth slowed, with the S&P CoreLogic Case-Shiller National Index rising 1.3% in September, down from 1.4% in August. The gap between inflation and housing appreciation widened to 1.7 percentage points, the largest since June.
Markets that surged during the pandemic, such as Tampa, Phoenix, Dallas, and Miami, saw price declines, while traditionally stable cities like Chicago, New York, and Boston posted gains. Analysts suggest this reflects a return to pre-pandemic dynamics, where urban fundamentals and employment trends drive value rather than remote work and migration.
Retail sales rose 0.2% in September, marking the fourth consecutive monthly gain, though this was slower than August’s 0.6% increase. After adjusting for a 0.3% rise in consumer prices, real spending dipped 0.1%. Spending increased at restaurants and miscellaneous retailers but fell at car dealerships, clothing stores, and electronics outlets.
Treasury Secretary Scott Bessent criticized Federal Reserve officials for publicly discussing policy direction, urging them to focus on the struggles of everyday Americans facing high borrowing costs. He argued that the shutdown had harmed economic momentum and supported a December rate cut.
Looking ahead, the resilience of consumer spending—fueled by a strong stock market and low unemployment—will be tested during the holiday season. While high-income households continue to spend freely, middle- and lower-income groups are also maintaining expenditure levels despite financial strain. Rising prices, rather than increased volume, are driving higher spending totals.
A Fox News poll found that 76% of Americans view the economy negatively, up from 67% in July, reflecting persistent affordability concerns. Meanwhile, gas prices have erased earlier discounts, with the national average at $3.055—nearly identical to the prior year’s $3.056, according to AAA.
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US economy latest, inflation, home prices and retail sales
Wall Street continued to waver Tuesday after a slew of economic data was released following the end of the government shutdown. n nThe Dow rose by around 550 points, or 1.19%, in the early afternoon session. The S&P 500 rose by 0.72% and the Nasdaq pushed higher by 0.41%. n nOn balance, traders focused on any sign that the latest economic news would boost the chances of a rate cut from the Federal Reserve when policymakers meet in a couple of weeks. n nSome Fed officials have in recent days telegraphed their intention to trim rates at the next meeting, invigorating markets. Traders are currently pricing in a chance of more than 80% that the central bank will ease off. n nBut the tech sector still continued to struggle Tuesday, with AI darling Nvidia falling by around 3% on news that Meta was mulling purchasing chips from Alphabet. n nData for September retail sales and wholesale inflation landed Tuesday, several weeks delayed by the recent US government shutdown. n nBut just when – or even if – the following months’ retail sales and Producer Price Index reports will be released remains TBD. n nThe federal statistical agencies are working their way through an unprecedented economic data backlog after the lengthy lapse in appropriations stymied efforts to collect, analyze and release reports for a month and a half. n nAs it stands now, several crucial economic reports for the month of October – notably the jobs report and the Consumer Price Index – won’t be published in their original form. Instead, partial data will be released alongside the November reports. n nAs of Tuesday midday, the Bureau of Labor Statistics had yet to provide an update as to whether and how the October PPI will be released as well as a rescheduled date for the November report. n nThe Census Bureau still has a “TBD” pasted by the October release date for retail sales. n nWhen economists and policymakers analyze inflation data, they often look to “core” indexes that strip out the categories of food and energy, which tend to be more volatile. n nIn the September Producer Price Index, that underlying trend looked fairly tame: Core PPI rose just 0.1% for the month, which brought the annual rate to 2.6%, the lowest since July 2024. This is better than the 0.3% monthly gain and 2.7% annual rate economists were expecting for core, according to FactSet consensus estimates. n nPPI doesn’t translate directly to the inflation consumers see; however, sharp-rising goods prices – specifically in the areas of gasoline, food and electricity – could be foretelling that those key household purchases could get even pricier than they already are. n nAmerica’s economic mood is souring as worries about the labor market mount. n nThe Conference Board’s latest survey of American consumers, released Tuesday, showed that consumer confidence declined sharply this month to a reading of 88.7, the lowest level since April, when President Donald Trump unveiled sweeping tariffs. n n“Consumers’ write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown,” Dana Peterson, the Conference Board’s chief economist, said in a release. The government shutdown ended earlier this month, so consumer confidence could rebound in December. n nThe survey also showed growing pessimism among respondents about job availability and income prospects in the next six months. n n“Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically, after six months of strongly positive readings,” Peterson said. n nThere have been high-profile announcements of layoffs in recent weeks, but that doesn’t immediately translate into higher unemployment, which was at a low 4.4% rate in September, according to the latest Labor Department data. n nTuesday’s PPI data indicated that some firms are shielding their customers from the brunt of the steep and blunt tariffs on imported goods, wrote Samuel Tombs, chief US economist at Pantheon Macroeconomics. n nHe noted the trade services category, which tends to be quite volatile, measures profit margins for wholesalers and retailers. So, economists have been watching that category closely as a potential indication for how much businesses might be absorbing some of the tariff costs versus passing them along to consumers. n nTrade services in September dipped 0.2%, following a 1.7% drop in August, PPI data showed. n n“But the picture differs markedly by sector, with auto retailers accepting substantially lower margins, while most other retailers are passing on all the rise in acquisition prices to consumers,” Tombs wrote. n nFor consumers, September PPI could mean better news if they’re in the market for sneakers or sports equipment, less so if they’re wanting to buy a new computer or TV. n nIn addition to auto dealers, the industries showing some of the biggest hits to their margins (and potentially lower cost increases for the end consumer) included retailers of sporting goods, clothing, shoes and jewelry as well as wholesalers of machinery, paper and plastics, PPI data shows. n nIndustries with the largest increases in margins (indicating higher costs are potentially being passed on to consumers) were retailers of TVs, video equipment, computers, furniture and flooring – categories where the US is heavily reliant on imports. n nUS home sales based on contract signings rose in October to the highest level in nearly a year, in a sign that lower mortgage rates are spurring home-buying activity. n nPending home sales rose 1.9% in October from the prior month, the National Association of Realtors said Tuesday, bringing the index to its highest level since November 2024. Sales were up across the country except in the West, with the Midwest seeing a robust 5.3% monthly increase. n n“The Midwest shined above other regions due to better affordability, while contract signings retreated in the more expensive West region,” Lawrence Yun, NAR’s chief economist, said in a release. “Days on the market typically lengthen from November through February, providing better negotiating power to buyers during the holiday season.” n nIt typically takes about a month or two for a home sale to close after an offer was accepted. Mortgage rates have been steadily declining since May, with the average rate on a 30-year fixed mortgage reaching this year’s lowest point in late October. Mortgage rates have increased slightly since. n nUS home prices increased in September at the weakest pace since mid-2023 as affordability challenges in major markets across the country kept buyers on the sidelines. n nThe S&P Cotality Case-Shiller US National Home Price Index rose 1.3% in September, S&P Global said Tuesday, slightly down from August’s 1.4% gain. n nThe index has been steadily weakening since 2022, when the Federal Reserve began to hike interest rates to tamp down inflation. The central bank is now lowering borrowing costs, with its benchmark lending rate at its lowest point in three years. n n“National home prices continued trailing inflation, with September’s (Consumer Price Index) running 1.7 percentage points ahead of housing appreciation,” Nicholas Godec, head of fixed income tradables & commodities at S&P Dow Jones Indices, said in a release. “This marks the widest gap between inflation and home-price growth since the two measures diverged in June, with the spread continuing to widen each month.” n nChicago, New York and Boston saw the strongest price gains in September, while home prices in Tampa, Phoenix, Dallas and Miami declined that month. n n“Markets that were pandemic darlings — particularly in Florida, Arizona, and Texas — are now experiencing outright price declines,” Godec said. “Meanwhile, traditionally stable metros in the Northeast and Midwest continue to post solid gains, suggesting a reversion to pre-pandemic patterns where job markets and urban fundamentals drive appreciation rather than migration trends and remote-work dynamics.” n nWall Street started the day on a fairly quiet note as investors digested a batch of long-delayed economic data. n nWithin minutes of the opening bell the Dow was already up by close to 270 points, or 0.5%. The broader S&P 500 hovered in and out of the red. The tech-heavy Nasdaq Composite fell 0.3%. n nStocks are coming off two days of strong gains as hopes for Federal Reserve rate cuts have boosted markets. However, the S&P 500 and Dow are still on track for their first losing month since April. The Nasdaq is set for its first losing month since March. n nInvestors were keen to see how aspects of the economy – like retail sales – fared in recent months. Investors have embraced hopes for Fed rate cuts after recent comments from central bank officials suggested a cut could be on the table. n nTreasury yields ticker lower Tuesday morning as investors leaned in to bets that the Fed will cut rates in December. n nGold futures rose 1.3%. Gold prices can rise when the Fed is expected to lower rates. n nWholesale goods prices leapt 0.9% in September – the sharpest monthly increase for the category in more than 18 months – and were the driver behind the overall September gain in the Producer Price Index, the latest data from the Bureau of Labor Statistics showed Tuesday. n nWholesale services prices were flat for the month. n nEnergy prices, particularly sharp-rising gas prices, accounted for about two-thirds of that goods index monthly increase. Within goods, categories such as meats, residential electric power and motor vehicles also moved higher. n nWhen taking energy out of the equation, as well as food, the underlying goods inflation trend perhaps shows a silver lining: n n“Core goods price gains slowed to 0.2% after a couple of larger pops, suggesting tariff pressure might be ebbing,” Sal Guatieri, senior economist at BMO, wrote Tuesday in a note to investors. n nThe federal government on Tuesday released key economic reports on inflation and spending, but the numbers likely did little to sway the heated debate among Federal Reserve policymakers. n nCentral bankers are split on whether they should lower interest rates again at their upcoming meeting in December. They’ve lowered rates twice this year, in September and October, each time by a quarter point, bringing their key interest rate to its lowest level in three years. n nOne side — mostly members of the Fed’s Board of Governors — argues that the Fed should continue lowering rates to preserve the labor market’s health, while the other camp believes that officials should hold rates steady and get the job done on inflation, considering that it has remained above their 2% target for more than four years. n nThe latest data didn’t offer any clear indication that the economy urgently needs any relief from the Fed — nor that price pressures are getting out of control. The numbers, delayed by the government shutdown, are also dated. n nRetail spending in September was on the weaker side, but it remained in positive territory. And inflation at the wholesale level that month came in mostly as economists had expected. n nSales at US retailers increased in September for the fourth consecutive month, boosted by low unemployment and a buoyant stock market. n nRetail sales, which account for about a third of overall spending, rose 0.2% in September, the Commerce Department said Tuesday. That was a much slower pace than August’s 0.6% gain. n nBut after factoring in the 0.3% increase in prices that month, according to the Consumer Price Index for September, retail spending edged down 0.1%. n nSpending was up across half of categories in September, increasing the most at so-called miscellaneous retailers by a solid 2.9%. Sales also increased at restaurants and bars, rising 0.7%. Meanwhile, sales were down at car dealerships, clothing stores, electronics retailers, department stores and online. n nThe report was originally due on October 16, but it was delayed because of the government shutdown. n nThe figures show that consumer spending, the lifeblood of the US economy, was somewhat weak heading into the current quarter, which stretches from October through December. In September, employers added jobs at a robust pace and unemployment ticked up but remained low. n nTreasury Secretary Scott Bessent, in a biting rebuke of the Federal Reserve, said members of the central bank should quit commenting publicly about the potential direction of rate-setting policy and focus instead on listening to Americans who are struggling with high borrowing rates. n n“It’s time for the Fed to move back into the background like it used to, calm things down, work for the American people, [and] set monetary policy on a good course,” Bessent said in an interview with CNBC Tuesday morning. “This isn’t sport; it’s people’s lives. We just need to calm down all these speeches by these bank presidents that are redundant.” n nMarkets have moved – sometimes dramatically – in recent days after Fed governors and regional bank presidents commented on potential monetary policy decisions. n nBut Bessent said he believes the Fed should lower rates in December, arguing that the government shutdown hurt the economy. n n“We know the economy hasn’t gotten better,” he said. “I’m not even sure what the discussion is here.” n nUS wholesale inflation picked up speed in September, an indication that prices could soon heat up even more for consumers. n nThe shutdown-delayed Producer Price Index for September showed that prices increased 0.3% on a monthly basis, keeping the annual inflation rate at 2.7%. In August, wholesale prices fell 0.1% on a monthly basis, largely because of compressed profit margins. n nAugust’s annual increase, which was initially estimated at 2.6%, was upwardly revised to 2.7%. n nEconomists were expecting that producer prices rose 0.3% from August and was 2.6% for the 12 months ended in September. n nBlack Friday through Christmas will test America’s economic strength. Preliminary reports look good: Early-bird holiday shoppers have been out in strong numbers this year, according to a report earlier this month from Bank of America. n nHigh-income consumers keep spending like they’ve never heard of this affordability crisis people keep talking about. n nMiddle- and lower-income folks, despite declaring that they’re fed up with their financial situations, are also still spending, in aggregate. n nBut Americans are all spending more in part because prices are higher. Stubborn inflation, combined with already-high prices, has forced people to shell out more for the holidays, pushing spending numbers up. n nIt’s one reason a poll published by Fox News this week showed 76% of Americans have a negative view of this economy, up from 67% in July. n nRead more here. n nSomething in the US economy isn’t adding up, and it’s rattling the people charged with wrangling inflation and keeping the labor market intact. n nUS companies have sharply slowed their hiring this year, hesitant to invest without knowing the full effects of President Donald Trump’s sweeping economic policies. The economy lost jobs in June and August, and the average pace of job gains for the three months ending in September was only around 62,000, according to the Labor Department. n nYet workers’ productivity, a key driver of economic output, remains high. And gross domestic product, which captures all the goods and services produced in the economy, has stayed robust. n nThat dichotomy of an expanding economy and a softening labor market presents a conundrum for policymakers at the Federal Reserve, complicating their efforts to determine whether the economy needs cooling or boosting. n nA growing economy, boosted by resilient consumers and massive investments in AI, should be spurring hiring, especially now that the Fed has started lowering borrowing costs. n nBut that hasn’t happened — and there are fears it won’t. n nRead more here. n nPresident Donald Trump and his economic team often respond to concerns about the affordability crisis by touting how much cheaper gasoline is than under his predecessor. n nFor the vast majority of 2025, this was a legitimate bragging point for the White House. n nUntil now. n nFor the first time since the start of Trump’s second term, the discount between this year’s prices and last year’s has effectively disappeared. n nThe national average for regular gas stood at $3.055 on Tuesday, almost exactly the same as $3.056 a year ago under former President Joe Biden, according to AAA. n nIn fact, Tuesday breaks an eight-day streak where the national average was up on a year-over-year basis, according to AAA data shared with CNN. n nIt’s a big shift from earlier this year, when gas was 30, 40 and even 50 cents cheaper than the same point in 2024. n nRead more here. n nUS stock futures were lower Tuesday morning as investors awaited a slew of economic data. n nDow futures fell 34 points, or 0.07%. S&P 500 futures fell 0.04%. Nasdaq 100 futures fell 0.11%. n nStocks are coming off two days in the green. The tech-heavy Nasdaq soared 2.69% on Monday, posting its best day since May. n nWall Street is trying to discern whether the Federal Reserve will lower its benchmark interest rate at its policy meeting in December. Traders on Tuesday morning were pricing in an 81% chance that the Fed cuts rates, according to CME FedWatch. n nNew York Fed President John Williams and San Francisco Fed President Mary Daly in recent days have suggested they could support a rate cut in December, which helped send stocks higher on Friday and Monday. n nStock investors like lower interest rates because it encourages spending and business activity, boosting corporate profits, while lowering bond yields, making stocks relatively more appealing. n n“During this holiday-shortened week, investors will receive a cornucopia of data now that the government is open again,” Ed Yardeni, president of Yardeni Research, said in a note. “Some of the data will be a bit stale. But they should indicate how [the third quarter] ended for the economy.” n nCNN’s Fear and Greed Index hovered in “extreme fear.” n nNext up in the pipeline of shutdown-delayed economic reports is the September iteration of the Producer Price Index. n nThis closely watched report provides a gauge on inflation at the wholesale level: It lays out the average change in the selling prices that producers receive for their goods and services. While PPI doesn’t directly translate to the Consumer Price Index, it’s viewed as a potential bellwether for the prices consumers may see in the months ahead. n nThat’s where things get interesting with this seemingly old-news report: The trajectory of the pricing trends in Tuesday’s report could provide a window into the price increases consumers are seeing currently and into the near future. n nThat could be especially salient considering the October CPI has been drastically marred as the shutdown hampered data-collection efforts. n nEconomists expect that producer prices likely rose 0.3% in September, which would be an acceleration from the preliminary 0.1% drop reported for August, a decline that was driven by compressed profit margins. The annual rate is expected to hold at 2.6%.