S&P 500, Nasdaq fall as September US inflation comes in at 3.7%

US stocks traded mixed on Wednesday, October 14, with the Dow Jones Industrial Average gaining while the S&P 500 and Nasdaq Composite declined, as hotter-than-expected September inflation data pushed Treasury yields higher and weighed on technology shares.

The Dow rose 102 points, or 0.2%, while the S&P 500 fell 0.4% and the Nasdaq Composite shed 0.7%. The tech-heavy Nasdaq and the broader market index came under pressure as investors assessed the latest inflation figures alongside a fresh round of corporate earnings.

The US consumer price index (CPI) rose 3.7% year-on-year in September, above economists' expectations of 3.6%. On a month-on-month basis, consumer prices increased 0.6%, in line with estimates, according to the data.

Core CPI, which excludes food and energy prices, rose 0.3% month-on-month and 2.6% year-on-year. Both readings were slightly above economists' expectations of 0.2% and 2.5%, respectively.

Treasury yields rise after inflation report

US Treasury yields climbed following the inflation data, adding pressure to equities, particularly technology stocks. The 10-year Treasury yield rose more than seven basis points to 5.293%, while the 30-year yield advanced more than four basis points to 5.609%.

Higher yields can weigh on equity valuations by increasing borrowing costs and reducing the relative appeal of stocks, particularly growth-oriented companies.

On the Dow, gains in healthcare stocks, including UnitedHealth and Amgen, helped the index outperform the broader market.

Chip stocks, bank earnings in focus

Investors also tracked developments in the semiconductor sector after a global chip sell-off. ASML reported record third-quarter sales and raised its full-year outlook, citing strong demand linked to artificial intelligence.

Markets are also looking ahead to Taiwan Semiconductor Manufacturing Company's earnings on Thursday for further indications of the strength of AI-related demand.

In the financial sector, Bank of America shares fell sharply after the lender reported a 17% year-on-year decline in third-quarter profit. A $1.2 billion regulatory penalty and a slowdown in its Wall Street business weighed on earnings, offsetting higher lending income.

Investors also assessed results from Morgan Stanley as the third-quarter earnings season gathered pace.

US stock market today: Dow, S&P 500 futures rise ahead of CPI report

US stock futures traded mixed on Wednesday, October 14, as investors awaited the release of September’s consumer price index (CPI) report, while the third-quarter earnings season gathered pace.

Futures linked to the Dow Jones Industrial Average rose 162 points, or 0.3%, while S&P 500 futures gained 0.2%. Nasdaq-100 futures slipped 0.1%, following a decline in US stocks in the previous session.

Investors will closely track the September CPI report for fresh clues on the inflation outlook and the Federal Reserve’s interest rate trajectory. Economists polled by Dow Jones expect consumer inflation to rise 3.6% year-on-year, compared with 3.4% in the previous reading.

Oil prices also traded higher, with Brent crude futures for December delivery rising 0.61% to $106.33 a barrel. US West Texas Intermediate (WTI) crude futures for November delivery advanced 0.63% to $94.73 a barrel.

Last week, US President Donald Trump announced a temporary easing of restrictions on Russian diesel fuel exports. However, analysts expect the move to have a limited impact on fuel costs for truckers and farmers.

Global markets trade mixed

Asian markets ended mixed, with Australia’s S&P/ASX 200 falling 0.62%. Japan’s Nikkei 225 rose 0.32%, while South Korea’s Kospi advanced 0.82%.

European equities traded higher, with the pan-European Stoxx 600 gaining 0.6%. France’s CAC 40 and Germany’s DAX each rose 0.6%, while the UK’s FTSE 100 advanced 0.4%.