From 13th place in 2022, Minneapolis, Minnesota is the second most neighborly city in America.

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This report comes from today’s CNBC Daily Open, our new newsletter for international markets. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can log in Here.

What you need to know today

S&P 500 in correction
The S&P 500 index slipped into correction territory on Friday on recession fears, closing 10.3% lower than its yearly high set on July 31. The Dow Jones Industrial Average closed 1.12% lower and the Nasdaq Composite remained 0.38% higher. Asia Pacific markets got off to a mixed start to the week ahead of key economic data from the region. Japan’s Nikkei 225 fell 1.03%, while South Korea’s Kospi gained 0.35%.

Hey, big spender
Inflation rose in September, but consumer spending was even stronger than economists expected, Commerce Department figures showed on Friday. The core consumer spending price index, the Fed’s main measure of inflation, was 0.3% higher for the month, in line with the Dow Jones estimate. Although prices rose, personal spending continued to rise, rising 0.7%, better than the 0.5% forecast.

A possible break?
The Federal Reserve is widely expected to leave interest rates unchanged at the end of its two-day policy meeting this week, even as its preferred inflation gauge remains well above its 2% target. Earlier this month, Fed Chairman Jerome Powell said “inflation is still too high,” fueling expectations that another rate hike may not be entirely out of the question.

HSBC’s record profit
HSBC reported quarterly profit after tax of $6.26 billion, a whopping 235% increase compared to the $2.66 billion in the same quarter last year. Profit before tax rose $4.5 billion to $7.7 billion in the three months to September due to a higher interest rate environment.

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The final result

Markets have endured another brutal week and are looking to cap off an even more turbulent month that saw the S&P 500 and Nasdaq indices slip into correction territory.

A correction occurs when an index falls by more than 10% (but less than 20%) from its last closing high. This is called a correction because the decline in the past often results in a “correction” and return of prices to their longer-term trend.

Investors have had to contend with everything from multi-year high Treasury yields to a busy earnings season to multiple inflation readings. A measure of personal consumption spending on Friday served as the latest evidence that American consumer spending remains healthy.

Core PCE rose 0.3% in September and 3.7% year over year, matching estimates from economists surveyed by Dow Jones. However, personal spending rose 0.7%, beating estimates of 0.5%. PCE is the Federal Reserve’s most popular inflation measure.

The reading came ahead of the Fed’s two-day policy meeting this week, at the end of which the U.S. central bank is expected to pause on rate hikes.

Dave Sekera, chief U.S. market strategist at Morningstar, says the Fed is done raising interest rates and predicts the central bank will begin cutting interest rates in the first half of 2024.

“As we forecast a slowdown in economic growth and a moderation in inflation, this allows the Fed to move to increasingly accommodative language in early 2024 to prepare the market in advance for the decision to begin cutting rates,” Sekera wrote.

A Fed meeting was by no means the only market-moving event investors expected. About 30% of the S&P 500 is expected to report earnings this week, including Apple, McDonald’s and Pfizer due to report quarterly results.

And if that wasn’t busy enough, market participants will also be watching the October jobs report out on Friday. The U.S. economy is expected to have added 175,000 jobs last month, according to FactSet consensus estimates. This will be a result of a staggering 336,000 new jobs compared to the previous month.

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