Wall Street stocks fall after hot inflation data

Stronger-than-anticipated US inflation figures sent Wall Street stocks plummeting on Wednesday, as concerns about additional interest rate hikes from the US Federal Reserve weighed heavily on shares. Companies like Oracle, CoreWeave, and other artificial intelligence stocks, which are particularly impacted by higher borrowing costs, suffered significant losses.

Oracle's stock plummeted by 8.8 percent, while AI infrastructure firms CoreWeave and Nebius saw declines of 15 percent and 10 percent respectively. Tech giants Dell and Hewlett Packard Enterprise experienced drops of 11.4 percent and 8.2 percent respectively, following a downgrade by Barclays to an equal-weight rating from an overweight one.

The Philadelphia Semiconductor Index plummeted 4.3 percent, marking its longest losing streak since May 2025. Despite Apple's market capitalization surpassing US$5 trillion for the first time, the company's stock rose by only 0.5 percent. US Labor Department data revealed that the core consumer price index increased by 0.3 percent in September, surpassing expectations of a 0.2 percent rise.

Annually, core CPI, which excludes food and energy prices, rose by 2.6 percent, exceeding forecasts for a 2.5 percent increase, while the headline rate climbed by 3.7 percent, above estimates for a 3.6 percent increase. Interest-rate traders now consider a 37 percent probability that Fed policymakers will raise rates this month, up from 22 percent on Tuesday, according to CME's FedWatch tool.

Market participants are unhappy with the report, as it puts pressure on the Fed to raise rates to combat inflation, according to Adam Sarhan, CEO of 50 Park Investments in New York. Inflation remains the market and the Fed's top concern. The S&P 500 ended the session with a 1.1 percent decline, reaching 7,718 points, its largest one-day drop since July 29.

The Nasdaq closed 1.9 percent lower at 26,692 points, marking its biggest daily drop since July 23. The Dow Jones Industrial Average saw a slight 0.1 percent decrease, settling at 51,621 points. Bank of America fell 4.8 percent, with its third-quarter profit falling as it set aside US$1.2 billion to cover regulatory fines for potential money laundering failures. Morgan Stanley declined nearly 3 percent, despite a rise in quarterly profit.