Markets in 5Thursday, October 15
Hot inflation revives Fed hike bets as stocks slide
The S&P 500 fell 1.1% after a hot September inflation report revived bets on a late-October Fed hike, while the 10-year Treasury yield eased to 5.19%.
Stocks
Hot inflation and AI jitters push stocks lower
The S&P 500 closed at 7,718.94 on October 14, down 1.11% and its fifth loss in six sessions after setting an all-time high. The Nasdaq Composite fell 1.88% to 26,692.87 and the Russell 2000 of smaller companies dropped 1.93% to 2,729.53. The Dow Jones Industrial Average slipped 0.09% to 51,621.48, while semiconductor and AI-linked names led the decline.
Economy
September consumer prices rose 3.7% from a year earlier
The Bureau of Labor Statistics said the consumer price index rose 0.6% in September from August and 3.7% over twelve months, above the 3.6% economists polled by Dow Jones had expected. Core inflation reached 2.6% from a year earlier against a 2.5% forecast. Gasoline prices rose 9.1% in the month and accounted for more than half the monthly gain, while average hourly earnings rose just 0.1%.
The Fed
Traders raise odds of October rate hike to 47%
Market pricing for a quarter-point increase at the late-October policy meeting rose to 47%, according to Axios, from 22.1% a day earlier. The federal funds target range is 3.75% to 4.00% after the Fed raised rates by a quarter point in September. New York Fed President Williams said on October 13 that one more hike may still be appropriate, but he sees no need for more after that.
Rates
Ten-year Treasury yield eases to 5.19% on the day
The official Treasury par yield on the 10-year note closed at 5.19% on October 14, down 2 basis points from 5.21% the day before. The 2-year yield was 4.82%, leaving the 2s10s spread at 37 basis points, and the 30-year closed at 5.52%. A month earlier the 10-year stood at 4.97%, and a year ago it was 4.03%.
Global
Asian equity markets fall sharply on tech sell-off
South Korea's Kospi index fell to 5,527.12 and Japan's Nikkei 225 to 64,334.68 in overnight trading as the tech sell-off deepened, with the Kospi on a seventh straight daily drop. Hong Kong's Hang Seng dropped 1% and Shanghai slipped 1.4%. European shares were steadier, down less than 0.3% early on, and US stock futures were mixed.