LIVE NOW: CPI DATA INFLATION REPORT OCT. 2026
In a Nutshell
October 2026 CPI came in hotter than expected at 3.7% headline and 2.6% core, triggering an immediate reversal that erased early futures gains and sent QQQ down ~1% and SMH down 2.2% within minutes. Energy components drove the miss, with gasoline surging 9.3% and fuel oil up 15.3%, while core services like shelter and transportation also contributed. The session stressed buying support zones, avoiding over-leveraged positions, and using proper sizing to stay positioned for volatility.
These notes were generated by AI and may contain inaccuracies.
Markets are preparing for the October 2026 CPI data release at 5:30 a.m. Arizona time. The Nasdaq is currently up 0.1 percent following choppy trading the previous day that ended slightly in the red. The QQQ ranged between highs of 746 and lows of 742. Pre-market action shows Micron moving from highs of 966 to lows of 936, while SK Hynix (South Korean memory chip company) is also trading lower. Focus remains on rate decision probabilities, with a 20 percent chance the Federal Reserve raises rates and a 79.3 percent chance they pause.
Expectations call for overall CPI at 3.6 percent versus the prior reading of 3.4 percent. Core CPI expectations sit between 2.4 and 2.5 percent. The data source is bls.gov/cpi. The report shows a 0.6 percent month-over-month increase, matching expectations. The gasoline index rose 9.1 percent. Year-over-year, all items rose 3.7 percent, exceeding the 3.6 percent forecast and moving up from 3.4 percent the prior month.
Core CPI (all items less food and energy) rose 0.3 percent in September versus the expected 0.2 percent increase. Core CPI year-over-year came in at 2.6 percent versus 2.5 percent expected. The headline CPI reading of 3.7 percent and core reading of 2.6 percent both exceeded forecasts.
Energy drove the inflation increase, with energy commodities rising 9.3 percent. Fuel oil showed the largest monthly increase at 15.3 percent. Gasoline (all types) increased 9.3 percent. Food showed no change overall, with food at home declining while food away from home increased.
Core CPI components (all items less food and energy) show:
- New vehicles and used cars and trucks: +0.7 percent
- Apparel: +0.3 percent
- Medical care commodities: -0.7 percent
- Shipping less energy services: +0.4 percent
- Shelter: +0.4 percent
- Transportation services: +0.6 percent
- Medical care services: +0.3 percent
Initial market reaction showed futures up with S&P approximately 0.3 percent, Dow 0.4 percent, and small caps 0.4 percent. The 10-year Treasury yield slipped from 5.4 percent to 5.22 percent then 5.19 percent. Dollar and gold remained flat. Energy rose 1.8 percent with oil moving past $95 on Middle East developments.
Within ten minutes post-release, markets reversed lower. QQQ dropped approximately 1 percent to near 738. SMH fell 2.2 percent. Tech declined 1 percent. Banks dropped 1.1 percent. Energy rose 2.6 percent and utilities gained 0.7 percent. Updated futures showed S&P down 0.2 percent, NASDAQ down 0.5 percent, small caps down 0.7 percent. The dollar rose 0.4 percent, gold fell 0.7 percent, and oil reached $95.34.
Core CPI strips out food and energy because those categories are volatile and driven primarily by supply shocks such as droughts, wars, or pipeline issues that the Federal Reserve cannot control. The Fed focuses on core to measure underlying demand trends. If headline inflation is hot solely due to oil spikes, rate hikes would harm the economy without addressing the root cause. Hot core readings indicate businesses and consumers are spending in ways that push prices higher across the board.
The speaker emphasizes buying oversold conditions at support zones and selling overbought conditions at resistance zones. Trading ranges are respected when markets oscillate between defined high and low levels.
Reddit (RDDT) shows 34.3 P/E ratio with fair revenue and net income. The stock has 32 percent upside to fair value with growing revenue, but single-digit growth makes it less attractive as a growth stock. The stock dropped 25-26 percent from highs of 208 to 153 while still trading at a 34 P/E ratio.
Micron (MU) is positioned between support at 900 and resistance at 1100. The company shows low P/E ratio with high revenue and net income. Concerns include cyclical memory industry dynamics, potential supply doubling by 2028 causing price erosion, and Chinese competition. The company generates $84 billion in revenue. Micron trades in cycles of high demand followed by oversupply phases.
NBIS, positioned as a fusion energy company, generates $42.2 million in revenue while trading at a P/E ratio of 101,337. The company faces a $200 billion financing gap for five gigawatt contracted capacity. Market cap stands at $56 billion. The stock dropped 50 percent from nearly $300 to $149 in 30 days.
Nike is at 12-year lows with 38 percent upside to fair value and trades at 17 times earnings. Revenue is no longer growing. The stock recently moved from 31 to highs of 36, testing previous resistance.
Over-leveraged positions create problems during market pullbacks. The speaker notes that only over-leveraged traders panic during selloffs, while properly positioned traders can take advantage of lower prices. The memory chip sector consolidated between 900 lows and 1000-1100 highs following the South Korean market concerns that drove Micron to 700 lows before recovering.
A major economic event requires careful positioning that allows tolerance for movement against you. Always remain optimistic about the ability to manage and mitigate risk if the trade moves unfavorably.
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Watch your position size. You can take advantage of the riskiest trades, but if you do it with the appropriate position size, it shouldn't devastate you even if you are wrong or it goes against you, right? We can all manage position size better.
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