Wall St slides as hot CPI data fuels rate-hike bets; chips, banks weigh
SPY•U.S. stocks fell after September consumer prices rose more than expected, lifting the market-implied chance of an October quarter-point rate hike to 46% from 21.6%. The S&P 500 fell 0.60%, the Nasdaq 0.78% and the Dow 0.06%.
1. Inflation lifts rate bets
Wall Street’s main indexes edged lower after September consumer prices accelerated, with a surge in gasoline costs contributing to a hotter-than-expected reading. Traders raised the implied chance of a quarter-point rate hike this month to 46%, from 21.6% before the data. CFRA Research chief investment strategist Sam Stovall said he believed the Fed would not raise rates in October, but that a December increase was increasingly likely.
2. Banks and chips weigh
Bank of America fell 8.5% after third-quarter profit declined and it set aside $1.2 billion for regulatory fines. Morgan Stanley slipped 3.4% despite higher quarterly profit, and the S&P 500 Banks index fell 2.4% to its lowest level in more than four months. Chip stocks also weakened: Intel fell 2.6%, Micron lost 1% and Nvidia slipped 1.7%.
3. Other notable moves
BlackRock gained 2% after reporting higher third-quarter profit, helped by increased fees from managing client funds. Liquidia jumped 28% after settling six pending lawsuits with United Therapeutics, ensuring uninterrupted access to Yutrepia. Oil prices edged higher, with Brent crude above $100 a barrel after two vessels were struck in the Strait of Hormuz.
