October inflation readings out this week have shown little progress toward the Fed's two percent inflation target, putting into question how deeply the Federal Reserve will cut interest rates in 2025.

Inflation increased to 2.6% in October, rising modestly from the previous month, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS).

When the Federal Reserve lowered its benchmark interest rate by half a percentage point in September, it wasn't a particularly surprising move. At that point, the Fed was expected to make its first rate cut of the year in response to cooling inflation.

The Dow and the S&P 500 ended slightly higher on Wednesday while the Nasdaq lost ground after October data showed consumer prices rising in line with expectations, adding support to bets that the U.S.