Traders work on the floor of the New York Stock Exchange during morning trading in New York City.
Michael M. Santiago | Getty Images
Stocks declined Thursday, with the S&P 500 and Dow Jones Industrial Average falling from records as economic data pointed to stubborn inflation.
The broad market index lost 0.21% to settle at 5,780.05, while the Dow dropped 57.88 points, or 0.14%, to finish at 42,454.12. The Nasdaq Composite dipped 0.05% to end at 18,282.05.
“Clearly today is being driven mostly by the CPI report,” said Luke O’Neill, portfolio manager at CooksonPeirce. “Not a huge surprise in most respects, but some of the underlying data is clearly a little bit hotter than anyone would prefer. On the margins, people are selling off small- and midcap stocks that are a little bit more rate sensitive.”
Wall Street digested September’s consumer price index, which rose 0.2% on a monthly basis, bringing the annual inflation rate to 2.4% from the previous year. That came in ahead of the 0.1% monthly gain and 2.3% year-over-year rate expected by analysts polled by Dow Jones. The year-over-year number is the lowest since February 2021.
After the hot CPI, Atlanta Fed President Raphael Bostic told The Wall Street Journal he was OK with standing pat at November’s rate meeting, instead of cutting like the market wants. “This choppiness to me is along the lines of maybe we should take a pause in November. I’m definitely open to that,” Bostic told the paper.
The data comes as concerns mount that the Federal Reserve may slow the pace of future cuts, and ahead of the central bank’s first policy meeting after September’s supersized move. Fed funds futures trading data suggests a roughly 85% likelihood of a quarter-percentage-point cut, according to CME Group’s FedWatch Tool.
Minutes from the latest meeting released Wednesday also appeared to signal some division over last month’s half-percentage-point cut. Although the “substantial majority of participants” supported the cut, some favored a smaller move.
O’Neill views Thursday’s data dump as further support for a 25 basis point reduction in November.
In other news, Universal Insurance surged about 12% as Hurricane Milton rippled through Florida. Meanwhile, Pfizer fell roughly 3% after activist investor Starboard Value accused the drug maker of threatening litigation against two former executives. Advanced Micro Devices fell 4% after launching a competing artificial intelligence chip to Nvidia.