US stocks slide as hot inflation cools risk appetite
SPY•All three major US stock indexes closed sharply lower after hotter inflation data, mixed earnings and rising oil prices dampened risk appetite. The Nasdaq fell 1.9%, its biggest one-day drop since July 23.
1. Stocks close lower
Wall Street retreated on Wednesday after consumer price data showed inflation heating up. All three major US stock indexes closed lower, with a 4.3% decline in chip stocks helping drag the Nasdaq down 1.9%, its biggest one-day drop since July 23.
2. Inflation and rate bets
The Labor Department’s consumer price index was the session’s biggest catalyst. Markets generally expect one more 25-basis-point rate hike before year-end, and bets are growing that the federal funds target rate will be 50 basis points higher before 2027, according to CME’s FedWatch tool. Long-dated Treasury yields turned lower, while the two-year yield advanced.
3. Oil and earnings
Front-month WTI crude settled up 1.0% and Brent rose 0.4%. Third-quarter earnings were mixed: Bank of America missed profit expectations, while Morgan Stanley and BlackRock surpassed analyst estimates.
