Key Takeaways
- US inflation came in softer than anticipated, with Headline CPI rising 0.3% and Core CPI cooling to 3.0% year-over-year, bolstering expectations for a Federal Reserve rate cut next week.
- Boeing (BA) shares dipped premarket after the company announced a nearly $5 billion charge due to further delays in its 777X jet program, pushing first delivery to 2027.
- Uber (UBER) is set to launch driverless rides in San Francisco next year, leveraging vehicles from Lucid (LCID) and self-driving technology from Nuro.
- The British Pound weakened significantly amidst concerns over the UK's upcoming Budget, which is expected to reveal a £20-30 billion hole in public finances due to a productivity downgrade.
- India and the EU reported significant progress in their Free Trade Agreement talks, aiming for a balanced deal by December, while Santander (SAN) urged UK government intervention in an £11 billion car finance compensation scheme.
US Inflation Cools, Paving Way for Fed Easing
The latest US inflation data has come in softer than expected, providing a positive signal for markets. Headline Consumer Price Index (CPI) rose by 0.3% month-over-month, falling short of the prior month's 0.4% increase. More significantly, Core CPI, which excludes volatile food and energy prices, cooled to 3.0% year-over-year, a deceleration from August's 3.1% pace and below the 3.1% consensus forecast. This mild inflation print strengthens expectations for the Federal Reserve to continue its gradual easing path, with a 25-basis-point rate cut widely anticipated next week. Following the news, the US Dollar Index weakened, while major stock indices rallied, with the Dow Jones Industrial Average jumping 514 points and the S&P 500 adding 1%.
Boeing Faces Setbacks with 777X Program
Aerospace giant Boeing (BA) saw its shares decline by 0.9% in premarket trading after announcing a substantial nearly $5 billion pre-tax charge related to ongoing delays in its 777X jet program. The company has now pushed the first delivery of the 777X to 2027, a further delay from the previously expected 2026 launch and the original 2020 target. Despite a 30% increase in Q3 revenue to $23.3 billion driven by higher commercial airplane deliveries, Boeing reported a net loss of $5.34 billion, or $7.14 per share, primarily due to the 777X charge. This marks a total of approximately $15 billion in charges related to the program.
Uber Accelerates Autonomous Ride Deployment in San Francisco
Uber (UBER) is making a significant stride into the autonomous vehicle market, announcing plans to launch driverless rides in the San Francisco Bay Area starting next year, with a full launch expected in late 2026. The ride-hailing company will utilize specially built autonomous taxis based on Lucid's (LCID) Gravity SUV, integrating self-driving technology from Nuro. Uber aims to deploy 20,000 or more Lucid-based autonomous taxis in multiple locations within six years. This move will place Uber in direct competition with existing robotaxi services in the region. The company is also exploring partnerships with Nvidia (NVDA) and Stellantis (STLA) for future autonomous vehicle initiatives.
UK Economy Faces Fiscal Headwinds Ahead of Budget
The British Pound has experienced further declines as investors brace for the UK's upcoming Budget, with concerns mounting over a significant economic blow. The Office for Budget Responsibility (OBR) is reportedly set to downgrade its productivity forecast by 0.3 percentage points, which could create a substantial £20-30 billion shortfall in public finances by 2029/30. Chancellor Rachel Reeves is under increasing pressure to identify tax rises or spending cuts to address this gap, with the Institute for Fiscal Studies estimating each 0.1 percentage point downgrade adds £7 billion to public borrowing. Meanwhile, Santander UK (SAN) has urged the government to intervene in an £11 billion car finance compensation scheme, warning that current proposals could harm consumers, jobs, and the broader economy. Santander has already provisioned £295 million for potential payouts and delayed its Q3 results awaiting clarity.
Global Trade and Corporate Developments
In other key developments, India and the European Union are making significant progress in their Free Trade Agreement (FTA) negotiations, with Commerce and Industry Minister Piyush Goyal noting a substantial reduction in "outstanding issues". An EU delegation is expected in New Delhi next week to finalize tariff discussions, with both sides aiming to conclude a balanced agreement by December. Bilateral trade in goods between India and the EU stood at $136.53 billion in 2024-25.
On the corporate technology front, IBM (IBM) has unveiled its new IBM Defense Model, an AI model specifically designed for defense and national security applications. Developed in collaboration with Janes, this AI aims to enhance mission planning and decision-making in secure environments, optimized for defense-specific tasks and deployment in air-gapped, classified, and edge settings.
Commodity markets saw spot silver rise by nearly 3%, reaching $48.44/oz. The price has shown volatility, with current real-time prices fluctuating around $47.15 to $48.74.
Finally, leaders from private equity firms Apollo Global Management (APO), Blackstone (BX), and Ares Management (ARES) have clarified that they held no investments in FirstBrands when the company filed for bankruptcy, and private credit financing for the firm was minimal. However, the bankruptcy of FirstBrands, with over $10 billion in liabilities, has drawn attention to potential structural weaknesses in the broader private credit market. In the US political landscape, bipartisan talks regarding a potential government shutdown are "picking up," though a resolution remains elusive, with Democrats linking funding to healthcare premium issues.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.