. Upcoming CPI data
Markets will have a chance to analyze fresh inflation data on Thursday, which could influence how the Fed approaches its upcoming policy decisions.
Economists expect the consumer price index (CPI), a key gauge of US headline inflation, to slow to 2.3% on an annual basis in September, down from 2.5% in August. The figure is expected to have fallen to 0.1% from 0.2% in the previous month.
Core CPI, which excludes volatile items such as food and fuel, is forecast to match August's 3.2% pace over the past 12 months and ease slightly to 0.2% on a monthly basis.
Elsewhere, weekly initial jobless claims are expected to rise to 231,000 from 225,000, although it remains to be seen how that figure may be affected by Hurricane Helene, which recently devastated the Southeast and ongoing strikes at aerospace giant Boeing (NYSE:BA).
Following last week's blockbuster jobs report, hopes have been raised that the Fed can achieve a "soft landing" for the US economy, in which a period of rising inflation is successfully contained without causing a collapse in the labor market or overall activity.
3. 'Majority' of Fed members favor big rate cut in September â minutes
According to the minutes, a "majority" of Fed officials favored cutting interest rates by half a percentage point at the September 17-18 meeting.
But there remains some conflict over the size of the cut, with one of the 12 members of the central bank's rate-setting committee -- Fed Governor Michelle Bowman -- opposing the move and favoring a more traditional quarter-point cut.
Minutes of the meeting showed some unspecified policymakers also thought a smaller cut might be needed, citing signs of job market resilience and concerns that inflation remained above the Fed's target.
However, Fed officials appeared to agree that a 50 basis point cut does not necessarily indicate a specific path forward for rate cuts.
Traders are pricing in about an 85% chance that the Fed will cut rates by another 25 basis points at its November meeting, according to the CME Group (NASDAQ:CME) FedWatch Tool. Meanwhile, there is about a 15% chance that borrowing costs will remain unchanged at their current range of 4.75% to 5.00%.
4. Delta Air Lines will release its report
The third-quarter earnings season for U.S. airlines kicks off this week, starting with results from Delta Air Lines (NYSE:DAL).
The Atlanta-based company reported record second-quarter revenue of $15.4 billion, although that was slightly below Wall Street estimates, as a boom in summer travel led to excess capacity that put downward pressure on fares.
CEO Ed Bastian moved to reassure investors at the time that the company's valuation would increase "significantly" from August onwards.
Analysts at Bank of America Securities said they expect seat capacity growth to continue to be a key focus when Delta reports on Thursday.
âWhile [Delta] may be trending toward a conservative target ahead of its [November 20] investor day, we continue to see a building backdrop for the industry as [...] air travel demand remains solid, [...] capacity growth continues to moderate, [...] and airlines are likely to see the greatest benefit from the recent decline in fuel prices in [the fourth quarter],â BofA analysts wrote in a note to clients earlier this week.
5. Crude oil rises as Hurricane Milton makes landfall in Florida
Oil prices rose on Thursday as Hurricane Milton hit Florida, adding to concerns about potential supply disruptions in the Middle East.
By 03:31 ET, Brent crude futures were up 0.7% to $77.09 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 0.7% to $73.77 a barrel.
Both contracts have fallen about 5% in the last two trading sessions.
In the US, Hurricane Milton made landfall in Florida and while the storm largely spared oil infrastructure in the Gulf of Mexico, it boosted gasoline demand in the state, which helped support crude prices.
Additionally, traders remain concerned about the potential for an escalation of conflict in the Middle East, especially if Israel targets Iranian oil facilities.
