Hot US Inflation Rattles Wall Street, Revives Fed Hike Fears

NEW YORK: Wall Street fell on Wednesday after September US inflation came in hotter than expected, reviving concerns that the Federal Reserve may tighten policy further.

The Dow Jones Industrial Average slipped 0.09% to 51,621.48, while the S&P 500 dropped 1.11% to 7,718.94 and the Nasdaq slid 1.88% to 26,692.87.

Headline consumer prices rose 0.6% month-on-month and 3.7% year-on-year, while core CPI increased 0.3% month-on-month and 2.6% year-on-year. Market-implied odds of an October Fed rate hike jumped to around 37% from 22% a day earlier.

US Inflation

Europe bucked the trend, with the STOXX Europe 600 gaining 0.43% to 637.75. Healthcare stocks lent support, along with stronger-than-expected results from ASML, whose outlook reaffirmed longer-term AI-related semiconductor demand.

Asian markets were mixed to weaker as an early rebound in chip stocks faded. Japan’s Nikkei 225 edged up about 0.05%, while South Korea’s KOSPI fell around 0.44% and Hong Kong’s Hang Seng slipped 0.13%.

In commodities, Brent crude settled higher at about US$106.11 a barrel as renewed attacks on vessels in the Strait of Hormuz and threats of further disruption kept Middle East supply risks elevated.

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