---
title: "September CPI: 3.7% inflation, 2.6% core, and which one stocks have answered to"
url: https://portfolio-terminal.com/blog/cpi-inflation-september-2026
author: "Julien Esnault"
publisher: "Portfolio Terminal"
published: 2026-10-14
type: market note
tags: ["Market News", "Inflation", "Federal Reserve", "Interest Rates"]
summary: "US CPI inflation was 3.7% in September 2026 and core CPI 2.6%, the BLS reported on October 14, both a tenth over the 3.6% and 2.5% economists polled by Dow Jones expected. In the 20 times since 1963 the 10-year yield rose a point in a year, the S&P 500 fell 7 times, always with core CPI at 3% or more."
---

> **Source:** Julien Esnault, "September CPI: 3.7% inflation, 2.6% core, and which one stocks have answered to", Portfolio Terminal, 2026-10-14. https://portfolio-terminal.com/blog/cpi-inflation-september-2026
> When you use a figure from this article, cite it with the line above and link to the URL. Figures are checked against the primary data named in the Sources line at the end.

## In short

- US consumer prices rose 3.7% in the 12 months to September 2026 and core CPI, without food and energy, rose 2.6%, the Bureau of Labor Statistics reported on October 14, 2026.
- Gasoline prices were 34.2% higher in September 2026 than a year earlier, and energy 20.4%, while core goods prices rose 0.7%.
- In the 20 times since 1963 that the 10-year Treasury yield rose a point or more in a year, the S&P 500 ended the 12 months lower 7 times, and in all 7 core CPI inflation was 3% or more.
- The one yield spike since 1963 with headline CPI at 3% or more and core CPI under 3% peaked in June 2006 (CPI 4.2% seasonally adjusted, core 2.6%), and the S&P 500 rose 6.6% in the 12 months to June 2006.
- On the nine CPI release days of 2026 before October, the S&P 500 moved 0.41% on average, less than its 0.63% on other 2026 sessions; on the twelve CPI days of 2022 it moved 1.93%.

# September CPI: 3.7% inflation, 2.6% core, and which one stocks have answered to

**The short version:** US consumer prices rose 3.7% in the 12 months to September 2026, the Bureau of Labor Statistics reported on Wednesday, October 14. Core CPI, without food and energy, rose 2.6%. Both came in a tenth over what economists polled by Dow Jones expected. The gap between the two is gasoline.

Core is the one to watch for a portfolio. When the 10-year Treasury yield jumped a full point or more in a year, which happened 20 times since 1963, stocks ended the year lower only when core inflation was 3% or more. Core is 2.6% today, and the 10-year yield is up 1.16 percentage point on the year.

## The September CPI numbers

| Consumer price index | September 2026 | Forecast | August 2026 |
|---|---|---|---|
| All items, 12 months | **3.7%** | 3.6% | 3.4% |
| Core (no food, no energy), 12 months | **2.6%** | 2.5% | 2.4% |
| All items, one month | **0.6%** | 0.6% | 0.4% |
| Core, one month | **0.3%** | 0.2% | 0.3% |

Forecasts: economists polled by Dow Jones, as reported by CNBC on October 13. The Cleveland Fed's nowcast, a model estimate built from daily oil and weekly gasoline prices, had 3.6% and 2.39%. The 12-month rates are the ones BLS headlines, not seasonally adjusted; the one-month changes are seasonally adjusted. The PCE price index the Fed targets comes later, on October 29; we covered August's in [August PCE inflation: 3.4%, core 3.0%](https://portfolio-terminal.com/blog/pce-inflation-august-2026).

What moved, line by line:

| Component | One month (seasonally adjusted) | 12 months | 12 months in August |
|---|---|---|---|
| Energy | +5.2% | +20.4% | +16.3% |
| Gasoline | +9.1% | +34.2% | +27.4% |
| Food | +0.0% | +2.5% | +2.7% |
| Shelter | +0.4% | +3.2% | +3.0% |
| Core goods | +0.3% | +0.7% | +0.7% |
| Core services | +0.4% | +3.1% | +3.0% |

![Horizontal bar chart of US consumer price changes over the 12 months to September 2026 by component: gasoline +34.2%, energy +20.4%, shelter +3.2%, core services +3.1%, food +2.5% and core goods +0.7%, against 3.7% for all items and 2.6% for core](https://portfolio-terminal.com/blog-sources/cpi-components-september-2026.png "US CPI by component, change over 12 months to September 2026. Source: BLS via FRED, not seasonally adjusted.")

Gasoline did most of it. It rose 9.1% in the month, which the BLS says accounted "for over half of the monthly all items increase." Core prices firmed on both sides: shelter rose 0.4% after 0.3% in August, core goods 0.3% after 0.1%. That lifted the 12-month core rate from 2.45% to 2.56%, its first rise since May. Headline CPI was the highest since May too, when it reached 4.2%.

## Why headline and core are 1.2 points apart

On the unrounded rates, 3.74% and 2.56%, the gap is 1.17 points. In September gasoline cost 34.2% more than a year earlier, and energy as a whole 20.4%. Core goods, from cars to clothes, rose only 0.7%.

Behind it is crude oil: Brent averaged $114.16 a barrel in September, 68% more than a year earlier and 34% more than in June (EIA spot price). We measured [13 oil spikes since 1970](https://portfolio-terminal.com/blog/how-commodity-prices-affect-stock-market): inflation rose in all 13.

The Fed [raised rates on September 16](https://portfolio-terminal.com/blog/fed-raises-rates-september-2026); [what the Fed actually changes](https://portfolio-terminal.com/blog/what-the-fed-actually-changes) for your loans and holdings is a separate read.

## Core inflation: the 3% line stocks have answered to

Our study of [whether stocks fall when bond yields rise](https://portfolio-terminal.com/blog/do-stocks-fall-when-bond-yields-rise) found 20 times since 1963 that the 10-year Treasury yield rose a point or more in 12 months. The S&P 500 ended 7 of them lower, all 7 with CPI inflation at 3% or more. We went back to those 20 and added core CPI at each peak (FRED CPILFESL, the month the 12-month rise in the yield peaked). Every one of the 7 losses came with core inflation at 3% or more, too.

| Inflation at the peak of the yield rise | Yield spikes | S&P 500 lower over the 12 months |
|---|---|---|
| CPI and core CPI both 3% or more | 13 | 7 |
| CPI 3% or more, core CPI under 3% | 1 (June 2006) | 0 |
| CPI under 3% | 6 | 0 |
| **Now: September 2026** | CPI 3.7%, core 2.6% | 10-year +1.16 pt on the year |

![Bar chart of the S&P 500 change over the 12 months to each of the 20 peaks of a 1-point rise in the 10-year Treasury yield since 1963, labelled with CPI and core CPI inflation: the 7 losses, from −4.9% in June 1978 to −31.8% in October 1974, all came with core CPI at 3% or more; June 2006, with CPI at 4.2% and core at 2.6%, gained 6.6%](https://portfolio-terminal.com/blog-sources/yield-spikes-cpi-core-sp500-1963-2026.png "S&P 500 over the 12 months to each yield-spike peak, with headline and core CPI. Sources: FRED (DGS10, CPIAUCSL, CPILFESL), Yahoo Finance (^GSPC).")

Today sits in the row with one entry. In June 2006 the 10-year had risen 1.21 point to 5.15%, gasoline cost 34.0% more than a year earlier, CPI was 4.2% and core 2.6% (seasonally adjusted, as in the study), and the S&P 500 had gained 6.6% over the 12 months. In September 2026 core was 2.6% and gasoline up 34.2%: nearly the same two numbers.

One case is not a rule, and we would not lean on it. What the table does say is narrower: in 63 years, the S&P 500 never ended a yield spike lower while core inflation stayed under 3%. The number to watch from here is core, not the headline. It was 2.6% in September, 0.4 point under the line. Over the last three months, though, core prices rose at a 3.4% annualized pace, over 3%.

## CPI days have been quiet in 2026

In 2022 a CPI report could move the S&P 500 5.5% in a day. This year it has barely moved it. On the nine CPI release days of 2026 before October, the S&P 500 moved 0.41% on average, up or down, less than on an ordinary 2026 session (0.63%). On the twelve CPI days of 2022 it moved 1.93%.

| 2026 CPI release | S&P 500 that day | 10-year yield |
|---|---|---|
| Jan. 13 (December CPI) | −0.19% | −1 bp |
| Feb. 13 (January) | +0.05% | −5 bp |
| March 11 (February) | −0.08% | +6 bp |
| April 10 (March) | −0.11% | +2 bp |
| May 12 (April) | −0.16% | +4 bp |
| June 10 (May) | −1.62% | +2 bp |
| July 14 (June) | +0.38% | −4 bp |
| Aug. 12 (July) | +0.26% | −2 bp |
| Sept. 11 (August) | +0.86% | +1 bp |

*bp = basis point, 0.01 percentage point. Close to close; the 10-year from the US Treasury par yield curve.*

## How markets took it

The report came out at 8:30 a.m. ET, an hour before the stock market opened. From just before to 15 minutes after:

| Market | 8:25 a.m. ET | 8:45 a.m. ET | Change |
|---|---|---|---|
| 10-year Treasury yield | 5.190% | 5.308% | +11.8 bp |
| 5-year Treasury yield | 4.981% | 5.135% | +15.4 bp |
| S&P 500 futures (Dec.) | 7,874.25 | 7,828.25 | −0.58% |
| Nasdaq 100 futures (Dec.) | 30,802.75 | 30,582.00 | −0.72% |
| Gasoline futures (Nov.) | $3.2365 | $3.2350 | −0.05% |
| Gold futures (Dec.) | $4,173.00 | $4,115.20 | −1.39% |
| US dollar index | 102.23 | 102.68 | +0.44% |
| Bitcoin | $83,580 | $82,742 | −1.00% |

*bp = basis point, 0.01 percentage point. Gasoline futures in dollars a gallon.*

Everything pointed one way: a hotter core sent yields up and stocks, gold and bitcoin down. In 20 minutes the 10-year yield rose 11.8 basis points, already more than its biggest close-to-close move on any 2026 CPI day in the table above, and S&P 500 futures fell 0.58%, more than the 0.41% the S&P 500 moved on an average 2026 CPI day. Follow the [10-year Treasury yield](https://portfolio-terminal.com/markets/10-year-treasury-yield) and the [2-year](https://portfolio-terminal.com/markets/2-year-treasury-yield), which moves first on the Fed.

## What to watch next

1. **The Fed on October 27–28.** It raised rates on September 16 and pencilled in one more hike this year.
2. **September PCE on October 29**, the day after the Fed decides: the measure its 2% target is set on.
3. **Core CPI for October, on November 10.** The line in the table above is 3%; core was 2.6% in September.

## What it means for your portfolio

What each kind of holding did on the two 2022 CPI days that moved the market most, one cooler and one hotter than forecast, is measured asset by asset in [the August PCE note](https://portfolio-terminal.com/blog/pce-inflation-august-2026): growth stocks moved most both ways, energy least. What is different now:

- **Cash pays more than inflation.** The 3-month Treasury bill yielded 4.26% on Oct. 13, 0.5 point more than headline CPI.
- **Bonds pay over inflation too.** The 10-year yield, at 5.21% on Oct. 13, is 1.5 points over headline CPI and 2.6 over core. The [10-year TIPS real yield](https://portfolio-terminal.com/markets/10-year-tips-real-yield), the yield on inflation-protected Treasuries, gives the market's own rate after inflation, and [how much Treasury bonds lose when yields rise](https://portfolio-terminal.com/blog/treasury-bonds-rising-yields-risk-hedge-2026) gives the sizes, both ways.
- **Energy is where the inflation is.** Gasoline up 34% on the year shows up in the price of energy stocks first; see [XLE](https://portfolio-terminal.com/analyse/xle) against the [S&P 500](https://portfolio-terminal.com/analyse/spy), and [what oil spikes did to each sector since 1970](https://portfolio-terminal.com/blog/how-commodity-prices-affect-stock-market).
- **Growth carries the rate risk.** If core turns up, the 2022 pattern says growth stocks, real estate and long bonds move most: [QQQ](https://portfolio-terminal.com/analyse/qqq), [VNQ](https://portfolio-terminal.com/analyse/vnq), [TLT](https://portfolio-terminal.com/analyse/tlt).

The table shows the market. Your holdings are the question. Add what you own to replay both 2022 CPI reports on it, from the close before each release to three sessions after:

*(Interactive shock replay: open https://portfolio-terminal.com/blog/cpi-inflation-september-2026 to run it on your own portfolio.)*

The [crash test](https://portfolio-terminal.com/crash-test) runs the same holdings through the whole 2022 rate shock, and the [portfolio X-ray](https://portfolio-terminal.com/x-ray) shows how much of them sits in rate-sensitive funds.

---

*This note explains a market event. It is not investment advice.*

Sources: [BLS, Consumer Price Index, September 2026](https://www.bls.gov/news.release/cpi.nr0.htm) · [FRED, CPI all items (CPIAUCNS)](https://fred.stlouisfed.org/series/CPIAUCNS) · [FRED, core CPI (CPILFENS)](https://fred.stlouisfed.org/series/CPILFENS) · [FRED, core CPI seasonally adjusted (CPILFESL)](https://fred.stlouisfed.org/series/CPILFESL) · [US Treasury daily par yield curve](https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve) · [BLS CPI release dates](https://www.bls.gov/bls/news-release/cpi.htm) · [BEA release schedule](https://www.bea.gov/news/schedule) · [CNBC, Dow Jones forecasts](https://www.cnbc.com/2026/10/13/september-consumer-price-index-inflation.html) · [Cleveland Fed inflation nowcast](https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting) · [FRED, Brent spot (DCOILBRENTEU)](https://fred.stlouisfed.org/series/DCOILBRENTEU)

Follow the numbers this report moves, updated every session: [10-year Treasury yield today](https://portfolio-terminal.com/markets/10-year-treasury-yield) · [2-year Treasury yield today](https://portfolio-terminal.com/markets/2-year-treasury-yield) · [S&P 500 today](https://portfolio-terminal.com/markets/sp-500).

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## Questions and answers

**What was CPI inflation in September 2026?**

The US consumer price index rose 3.7% in the 12 months to September 2026 and 0.6% in the month, seasonally adjusted, the Bureau of Labor Statistics reported on October 14, 2026. In August the 12-month rate was 3.4%. Economists polled by Dow Jones had expected 3.6%.

**What was core CPI in September 2026?**

Core CPI, which leaves out food and energy, rose 2.6% in the 12 months to September 2026 and 0.3% in the month, seasonally adjusted, according to the Bureau of Labor Statistics. Over the three months to September, core prices rose at a 3.4% annualized pace.

**Why is headline CPI higher than core CPI?**

Because of energy. Headline CPI counts food and energy; core CPI does not. In September 2026 gasoline prices were 34.2% higher than a year earlier and energy as a whole 20.4%, which put headline CPI at 3.7% against 2.6% for core, a gap of about 1.2 points on the unrounded rates.

**Do stocks fall when inflation is over 3%?**

Not on inflation alone, but it has mattered when bond yields rose with it. Since 1963 the 10-year Treasury yield rose a point or more in a year 20 times; the S&P 500 ended 7 of those 12-month periods lower, all 7 with headline CPI at 3% or more and core CPI at 3% or more. None of the 6 with CPI under 3% ended lower.

**Will the Fed raise rates in October 2026?**

That is open. The Federal Reserve raised its target range to 3.75%–4% on September 16, 2026, and its median official projected one more quarter-point hike in 2026. The next meeting is October 27–28, 2026. Core CPI, the measure that has come with stock losses in past yield spikes, rose to 2.6% in September from 2.4%.

**How did markets react to the September 2026 CPI report?**

Between 8:25 and 8:45 a.m. ET on Wednesday, October 14, 2026, around the 8:30 release of the September CPI, S&P 500 futures for December moved −0.58% and the 10-year Treasury yield +11.8 basis points. The 5-year yield rose 15.4 basis points and gold futures fell 1.39%, a hotter-than-expected reading on every market.