Nasdaq ends sharply lower as hot inflation data stirs rate-hike worries
SPY•The Nasdaq Composite fell 1.85% and the S&P 500 lost 1.08% after September inflation rose more than expected, lifting market expectations of another Federal Reserve rate hike. Traders priced in a 37% chance of a rate increase this month, up from 22% on Tuesday.
1. Inflation pressures stocks
Hotter-than-expected September inflation sent the Nasdaq to a sharply lower close on Wednesday as investors worried the Federal Reserve could raise rates further. The S&P 500 fell 83.96 points, or 1.08%, to 7,721.49, while the Nasdaq Composite dropped 502.90 points, or 1.85%, to 26,701.48; the Dow lost 0.09% to 51,624.87.
2. Rate expectations rise
Consumer prices accelerated as gasoline costs surged and price pressures broadened beyond energy. Interest-rate traders put the chance of a rate hike this month at 37%, up from 22% on Tuesday. Oracle, CoreWeave and Nebius tumbled, while the Philadelphia SE Semiconductor index fell for a sixth straight session.
3. Financial stocks retreat
Bank of America fell after its third-quarter profit declined and it set aside $1.2 billion for regulatory fines tied to failures to detect potential money laundering. Morgan Stanley also dropped despite higher quarterly profit, and the S&P 500 Banks index reached its lowest level in more than four months.
