Inflation pushes major indexes lower
United States stocks recorded their worst session since July after a report showed inflation accelerated more than economists expected. The S&P 500 fell 1.1%, marking its fifth decline in six trading days. Meanwhile, the Nasdaq composite dropped 1.9%, and the Dow Jones Industrial Average slipped 0.1%.
Consumer prices rose 3.7% from one year earlier, above the 3.4% rate in August and the 3.6% forecast. Higher fuel costs linked to the war with Iran contributed to the increase. Brent crude gained 0.4% and reached $106.06 per barrel.
Bond yields raise expectations for rate hikes
The inflation report pushed the 10-year Treasury yield briefly above 5.32% from less than 5.17%. Shorter-term yields also climbed as traders increased expectations for additional Federal Reserve action. However, bond yields gave back part of their gains later in the session.
The Federal Reserve recently raised its key rate for the first time in three years to restrain inflation. Traders estimated a nearly 35% chance of another increase at the next meeting, compared with 22% one day earlier. Persistent consumer spending has also allowed businesses to continue raising prices.
Technology and bank shares deepen losses
Higher borrowing costs pressured companies that need financing for artificial intelligence chips and data centers. Nvidia fell 3.2%, Broadcom lost 3.1% and Advanced Micro Devices dropped 5.7%. CoreWeave plunged 15.5%, while Oracle sank 8.8% and GE Vernova declined 6.2%.
Bank of America fell 4.8% after reporting weaker profit and revenue than analysts expected. State Street lost 4.1% following disappointing revenue. Smaller companies also struggled, sending the Russell 2000 down 1.9%. Abroad, European markets edged higher after Asian indexes weakened, including a 0.9% decline in Shanghai.
References
Choe, S. (2026, October 14). US stocks drop to their worst day since July as inflation worsens. AP News. https://apnews.com/article/stock-markets-earnings-bonds-artificial-intelligence-704d3190f0fba2908df07c85f26346ec