US inflation beats expectations, Wall Street turns negative and the Ftse Mib falls below 50,000 points

On the morning of October 14, European stock exchanges were confirmed to be rising but cautious, awaiting the US inflation data expected in the early afternoon. Oil remained a source of concern for investors after missile and drone attacks by the Houthis against Saudi Arabia had heightened uncertainty over energy supply: WTI had risen to 94 dollars, while North Sea Brent remained flat at 105 dollars.

The data, released in the afternoon, changed the scenario. According to the Bureau of Labor Statistics, the September consumer price index rose by 0.6% compared to the previous month, after August’s +0.4%; on an annual basis, inflation rose from 3.4% in August to 3.7% in September, exceeding expectations. The gasoline index alone recorded a 9.1% increase during the month, representing — according to the BLS — more than half of the monthly increase in the overall index; the energy index as a whole rose by 5.2% on a monthly basis and by 20.4% on an annual basis.

The market reaction was immediate. Wall Street turned negative, while Treasury yields rose again: the 10-year yield rose to 5.306%, up 8.9 basis points from the previous session. On Piazza Affari, the Ftse Mib fell back below the 50,000-point mark, held back mainly by sales in the banking sector.

The market day thus tells a story of two movements: the caution of the morning, linked both to anticipation of the US data and to tensions over oil supply following the attacks in Saudi Arabia, turned in the afternoon into an outright correction, triggered by higher-than-expected American inflation and a rise in bond yields.

The Ftse Mib closes the afternoon below 50,000 points, with the banking sector as the main factor behind the sell-off.