The S&P 500 took a hit on Wednesday, dropping 0.6% as investors reacted to September's consumer inflation data. It was hotter than expected. The Nasdaq Composite also slipped, down 0.8%. Meanwhile, the Dow Jones Industrial Average edged up 28 points, or 0.1%. Gains in healthcare stocks like UnitedHealth and Amgen helped it stay in the green.
September's consumer price index (CPI) revealed a 0.6% rise compared to the previous month, which was in line with forecasts. But the year-over-year increase hit 3.7%, slightly above the 3.6% analysts were expecting. Core CPI, which excludes food and energy, also outpaced predictions with a 0.3% monthly rise and a 2.6% annual uptick. These numbers pushed Treasury yields higher. The 10-year yield jumped over 7 basis points to reach 5.293%, while the 30-year yield climbed more than 4 basis points to 5.609%.
Jeff Schulze, Franklin Templeton Institute's head investment strategist, commented that the inflation report could complicate things for risk assets. It might lead to increased expectations for near-term rate hikes, which would likely boost the dollar but could weigh on equity valuations.
Oil prices remained elevated, with U. S. West Texas Intermediate futures climbing 1% to hover around $95 per barrel. Despite President Donald Trump's announcement to ease some restrictions on Russian diesel exports, analysts remain skeptical about any meaningful impact on fuel costs for truckers and farmers.
Bank of America shares were down 3% after its third-quarter results were released. This came a day after the bank was slapped with over $1.2 billion in federal penalties for failing to report more than $5 billion in suspicious transactions. In contrast, Morgan Stanley posted better-than-expected quarterly results, with earnings per share of $3.03 and revenue of $20.34 billion. Still, its shares dipped nearly 1%.
The tech sector had a tough day, especially semiconductor stocks. Micron Technology lost 1% after shedding more than 3% the previous day. Advanced Micro Devices dropped 3%, while Intel and Sandisk each fell 2%.
BlackRock shares, however, rose over 2% after reporting strong third-quarter earnings. Profits jumped to $1.66 billion, or $10.57 per share, from $1.32 billion, or $8.43 per share, a year earlier. The company's assets under management swelled to $15.49 trillion from $13.46 trillion the previous year.
In the chip sector, SpaceX CEO Elon Musk criticized high memory chip prices, taking aim at some manufacturers for their pricing strategies. He praised Micron for its reasonable approach to future pricing, hinting that others might risk losing customer loyalty.
Elsewhere, the International Monetary Fund's Managing Director Kristalina Georgieva pressed U. S. Treasury Secretary Scott Bessent to tackle the deficit. She warned that relying solely on growth to manage government debt wouldn't cut it, stressing the need for additional fiscal measures.
In renewable energy, Orsted's shares fell 3.12% after the U. S. Department of Justice announced plans to review the approval of its Revolution Wind project in Rhode Island. This review could affect the Danish company's offshore wind plans in the U. S.
The International Energy Agency issued a warning about ongoing diesel market constraints, forecasting tight supply through late 2027. Disruptions from the Iran conflict and significant inventory declines are to blame. Last month, global diesel exports fell by 700,000 barrels per day year-on-year, with losses from Russia and the Middle East only partly offset by increased supply from other regions.
ASML, a chipmaker from the Netherlands, saw its shares rise 2.6% after releasing strong third-quarter earnings. The company reported a net profit of 4.96 billion euros ($1.12 billion), exceeding forecasts of 4.1 billion euros.
