Bloomberg, citing an internal memo, reports that the AI cloud company’s CEO stated in a memo that the market is acting “irrationally.”

“When you are building a new type of technology company, there will be periods of time when the market misunderstands and acts irrationally,” CEO Mike Intrator wrote to staff. “We are confident in our business model, our customers, the extraordinary quality of our execution, and the relentless discipline around the financial engine we have built.”

Michael B. Kelley | Yahoo Finance

But even “core” inflation, which excludes energy and food, increased more than economists projected, rising 2.6% annually, up from 2.4% in August.

The latest figures complicate the Federal Reserve’s task of bringing down inflation to its 2% target. Traders had widely been expecting the Fed to hold interest rates steady at its meeting later this month, but odds of a hike are now rising on the September data.

Molly Moorhead | Yahoo Finance

The Dow Jones Industrial Average (^DJI) added 0.2%. The S&P 500 (^GSPC) rose 0.7%. The tech-heavy Nasdaq Composite (^IXIC) also posted a new record, gaining 1%. AI chip heavyweight Nvidia (NVDA) also hit an all-time high.

The 10-year Treasury yield (^TNX) rose 3 basis points to 5.31%, hovering near its highest levels since 2002, but stocks extended a Friday rally on pared-back Fed rate-hike bets.

Grace O’Donnell, David Hollerith and Ines Ferré | Yahoo Finance

But believe it or not, the US economy is nearing an impressive achievement on the unemployment front.

The US unemployment rate is nearing a record number of consecutive months below 5%, Truist chief strategist Keith Lerner pointed out (see the chart below). The longtime record dates back to the mid-1960s.

It’s a worthwhile perspective to keep in mind as markets attempt to rationalize a surprisingly weak September jobs report.

Brian Sozzi | Yahoo Finance

Mortgage rates are tuned to the government bond market

One of the most useful indicators for predicting mortgage rates is the yield on the 10-year U.S. Treasury note. Mortgage rates and 10-year Treasury yields typically move in the same direction, although mortgage rates are usually higher because lenders factor in additional risks. This difference is known as the spread, and we’ll account for it when estimating where mortgage rates could go.

With that in mind, the first step is to look at where economists believe Treasury yields are headed over the next five years. To build a forecast, we’ll combine expert economic projections with data compiled using artificial intelligence.

Hal Bundrick, CFP® | Yahoo Finance

Successful IPOs for both Anthropic and OpenAI are contingent on optimism that revenue from their clients will eventually outpace that spending.

Two new analyses call that math into question.

Michael B. Kelley & Julie Hyman | Yahoo Finance

“Further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion,” Barr said in a speech in Chicago. “Inflation is above our 2% target and not clearly trending toward target in a timely way. Moreover, risks to achieving our inflation target have increased, while risks to the labor market have receded.”

Jennifer Schonberger | Yahoo Finance

The average 30-year fixed-rate mortgage jumped 15 basis points to 7.12% in the week ended September 18, the Mortgage Bankers Association said on Wednesday. It was last higher in May 2024.

Mortgage rates ‌have risen more than ⁠a full percentage point since joint US-Israeli strikes against Iran began pushing up the global price of oil ⁠in late February, putting the squeeze on prospective homebuyers and a chill into the US housing market.

Ann Saphir | Yahoo Finance

Such a move would mark the Fed’s first increase in the fed funds rate since 2023, when the Jerome Powell-led central bank concluded its post-pandemic hiking campaign. However, inflation has now remained above the Fed’s 2% target for more than five years, with the war in the Middle East serving as the latest driver of higher prices.

Grace O’Donnell | Yahoo Finance

The median Fed official expects one more rate hike this year, according to the central bank’s Summary of Economic Projections, also known as the dot plot.

The move was the Fed’s first increase in the fed funds rate since 2023, when the Jerome Powell-led central bank concluded its post-pandemic hiking campaign. It was also largely priced in by the market, even as Federal Reserve Chairman Kevin Warsh has been adamant about not providing markets with forward guidance.

Markets will closely scrutinize Warsh’s press conference at 2:30 p.m. ET for hints about his thinking on inflation and monetary policy in the next few years.

Grace O’Donnell | Yahoo Finance