US stocks end lower as hot inflation data, Fed comments heighten rate worries
SPY•US stocks fell after consumer prices rose 0.4% last month, above the 0.3% estimate, and Fed officials signaled further rate increases. Markets fully priced in at least a quarter-point December hike; the Dow fell 0.30%, the S&P 500 0.38% and the Nasdaq 0.74%.
1. Stocks retreat on inflation
The Consumer Price Index rose 0.4% last month, its third straight increase of at least 0.4% and above economists’ 0.3% estimate. The Dow Jones Industrial Average fell 157.86 points to 52,231.89, the S&P 500 lost 29.01 points to 7,520.93 and the Nasdaq Composite dropped 187.26 points to 25,065.87.
2. Rate expectations climb
Markets fully priced in a December rate increase of at least 25 basis points, up from an 84% probability on Monday, while the chance of a half-point increase rose to 11.8%. The two-year Treasury yield climbed nearly 18.9 basis points to 4.736%. The S&P 500 technology sector fell 1.4%, with Nvidia down 5.4%; declining stocks outnumbered advancers 2.27 to 1 on the NYSE and 2.26 to 1 on Nasdaq.
