Nasdaq ends sharply lower as hot inflation data stirs rate hike worries

The Nasdaq closed sharply lower on Wednesday (Oct 14) as hot inflation data increased concerns about additional interest rate hikes from the US Federal Reserve. The technology and communication services sectors saw declines, with artificial intelligence stocks particularly affected due to their sensitivity to higher borrowing costs.

Oracle fell 8.8%, while CoreWeave and Nebius dropped 15% and 10%, respectively. Dell and Hewlett Packard Enterprise also suffered, with declines of 11.4% and 8.2%, respectively, following a downgrade from Barclays. The Philadelphia Semiconductor Index fell 4.3% for a sixth consecutive session. US consumer prices surged in September due to rising petrol costs and broader price pressures.

Investors are pessimistic about the report, believing it will pressure the Fed to raise rates further to combat inflation. The S&P 500 fell 1.11% to 7,718.94 points, its largest one-day drop since July 29. The Nasdaq declined 1.88% to 26,692.87 points, its biggest drop since July 23. The Dow Jones Industrial Average slipped 0.09% to 51,621.48 points.