| Good morning. US stocks fall as traders mull Fed's next move. `Dune' studio looks to buy out Wanda's stake. BlackRock is said to invest in Hyundai India's IPO. Here's what's moving markets. —Isabelle Lee Five Things will publish its last edition as a digital product on Oct. 11. To keep you up to speed, you will automatically begin receiving the new, more expansive subscriber-only Markets Daily newsletter starting Oct. 14. Not a Bloomberg.com subscriber yet? You'll get a complimentary trial of Markets Daily. A version of Five Things Asia will still be available on the Bloomberg Terminal. Stocks in the US fell after data showed hotter-than-expected inflation and a softening in the labor market, amplifying the debate over whether the Federal Reserve will opt for a smaller rate cut next month or even a pause. Following a rally to all-time highs, the S&P 500 took a breather. While Thursday's economic figures were not perceived as catastrophic, they did highlight the challenge of bringing inflation back to the Fed's 2% target without cooling the job market too much. For now, bond traders are continuing to bet the central bank will reduce the pace of cuts to 25 basis points next month. The S&P 500 fell, as most major groups retreated. The yield on 10-year Treasuries was little changed at 4.07%. The dollar wavered. Jane Street's soaring profits have emerged as a focal point in its legal battle with two ex-traders and Millennium Management over their alleged theft of a secret billion-dollar India options trading strategy. Jane Street in April accused them of stealing the "immensely valuable" strategy, causing it significant losses. But lawyers for the defendants said that Jane Street's India options team actually posted record results in the months after the traders left to join Izzy Englander's hedge fund. The profit dispute raises the possibility that Jane Street, one of Wall Street's most secretive firms, may end up revealing more about its finances in court than elsewhere. Legendary Entertainment LLC — the studio behind Dune and Godzilla vs. Kong — is in advanced talks to buy out Dalian Wanda Group Co.'s stake in the company, people familiar with the matter said, as the Chinese conglomerate looks to unwind one of its most high-profile overseas acquisitions. Legendary and Apollo Global Management Inc. are poised to take control of the company after the potential deal, the people said. Wanda acquired the film studio for about $3.5 billion in 2016. Apollo bought a $760 million equity stake from Wanda in 2022. BlackRock and Singaporean sovereign wealth fund GIC are among those that have made bids to buy stock in Hyundai Motor India's $3.3 billion initial public offering, sources told Bloomberg. The record-breaking IPO in Mumbai is also attracting other local and international institutional investors, the people said. The so-called anchor book for the IPO, which is set to be the biggest ever in India, has been fully allocated, with half going to domestic institutions and the other half to international investors. Traders can look to South Korea for a monetary policy decision, with Bloomberg Economics expecting the Bank of Korea to cut its base rate by 25 basis points. India's industrial production data are due; growth is seen as likely decelerating to 0.8% year-on-year in August from 4.8% in July. Here's what caught our eye over the past 24 hours: - Three Fed officials shrug off CPI report; Bostic open to pause
- Fired Goldman VP seeks £3.8 million in paternity leave spat
- Ex-PBOC official gets suspended death sentence for taking bribes
- Trump vows to eliminate income taxes on Americans living abroad
- Ex-UBS CEO Ralph Hamers joins former Googlers' AI wealth firm
- Ethel Kennedy, matriarch of famed political family, dies at 96
The US session Thursday was dominated by conflicting economic data releases. But it was hard to get a feel for what traders thought the news means for the US economy. In the end, stocks traded down and US Treasuries rallied. Over the course of time, I would expect the opposite though: Yields are likely to rise as CPI showed both core and headline inflation above consensus estimates, while stocks are underpinned by a strong US economy. Here's why: The most recent US non-farm payroll report is the last "clean" one we will see before the next Federal Reserve rate decision, given the recent strikes and hurricanes. Yesterday's jobless claims number confirmed that. The mere fact that initial claims claims were 258,000 versus 225,000 the previous week tells you these were hurricane-impacted numbers. The 42,000 rise in continuing claims was less disproportionate to the previous print and more in line with the initial claims rise, further suggesting this is just noise. On the other hand, with US core consumer price inflation up 0.3% over the prior month, we're seeing core inflation running well in excess of a 3% annualized pace, with higher food and energy prices in the pipeline to boot. That's price pressure driven by a strong economy, with the widely followed Atlanta Fed GDP tracker saying the US economy grew at more than a 3% annualized rate last quarter. As all of this becomes clear, we should expect the market's initial reaction to reverse and for Treasury yields to face upward pressure. But a strong economy continues to favor a US market where the year-to-date gains for the S&P 500 are the strongest this century. We'll see what kind of momentum we get with US bank earnings Later today. Ed Harrison writes the Everything Risk newsletter. Follow him on X at @edwardnh. | 
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