SOTS 2ND Hour More record highs on the S&P and Nasdaq after new inflation data 9/11/25

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Sara Eisen (1:07)

Good Thursday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber live as always from Post 9 of the New York Stock Exchange. S&P had a record high, up another half a percent today, and it looks pretty broad-based. Every sector higher, except for communication services right now, which is lagging by a bit, thanks in part to Alphabet, AT&T, Comcast, T-Mobile, and Netflix. All the other sectors are higher. Healthcare's actually in the lead today, up a percent. Materials, real estate, financials, industrial's all doing well. NASDAQ Composite up four tenths of one percent. As tech continues, it's rally. That really powered the rally yesterday with Oracle and some of the chip stocks. Chip stocks up again today. Take a look at Treasury's reaction to the joint release of, I would say, CPI and jobless claims. We'll talk about both, but they're rallying again with the 10-year yield just above four percent after dropping below there. The two-year yield, three and a half percent. Today, Commerce Secretary Howard Lutnick joins us here at Post 9 That interview coming up in just a few moments. Plus, Oracle has mentioned adding more than $240 billion in market cap yesterday alone. After shocking Wall Street with results, we'll talk about the next software name due out with earnings after the bell today. But first up, guys, let's talk about CPI because the overall headline number comes in hot. It's not a great headline, up 0.4 percent on the month. That was more than expected. It was the biggest monthly increase since January.

So, not great. The year over year number, 2.9 percent. The core number was to strip out food and energy, which is volatile, up 0.3 percent. That was in line with July. And core CPI is 3.1 percent. But look under the hood. You know, everyone's going to say, oh, inflation, oh, the tariffs are producing inflation. If you look at what drove this number overall, it wasn't necessarily tariff-induced. Shelter was the biggest contributor. Also, energy prices went up over the month. That helped. The way I'm looking at tariff-induced inflation is right here. Core goods, 0.276. We do unrounded to show you exactly where it is. And the truth is, it hasn't seen a big increase from where we were in the prior months on that core goods number. Does that mean that tariffs are not filtering through? Of course they are. We've heard that from companies. You see it in spots like tomatoes and coffee and apparel actually saw a little bit of a rise this month. But overall, it's not having the effect. You can also look at places like video equipment or furnishings, which are also imported items, and those saw lower increases on the month. So the read on this, and I think the market is telling you, it's not necessarily taking us off trend in a very worrisome way when it comes to inflation that would lead the Fed not to cut next week and potentially not to be dovish. The bigger worry actually came from the jobless claims number, which saw a big jump up to the highest level we've seen in years. Americans filing for unemployment claims, there's a spike at the end of the chart. And that's why I think the bond market is rallying and telling you that needs to be more worried about jobs than inflation.

Carl Quintanilla (4:07)

Yeah, I mean, it's the combination, isn't it, of the sticky inflation, maybe not dramatically higher, but sticky, combined with the worsening employment picture. Did you see real average hourly earnings year on year? Went from one one to four tenths?

Sara Eisen (4:21)

Right, and so that's another sign, obviously of softness in the labor market. Fed's got a dual mandate, right? Maximum employment, and that is the one that the market, and increasingly the Fed, is paying attention to and getting worried about, which is why I think the bond market is telling you that they're gonna stay on track to cut. Probably, you won't hear as much about a 50 basis point cut, a double cut on the jobs numbers, whereas you might otherwise would, and why? Because inflation is sticky, and because they're not meeting their mandate, and because there's signs of inflationary pressure in the economy. However, the jobs market now, you can take job openings, you can take the latest job creation, you can take the revisions down more than 900,000 over the last year and add it all up, and there's pressure building in the labor market, and it's not as good as it looked, which is why the Fed hadn't been cutting rates earlier in the year, because they thought they had a good job market on their hands.