Traders work on the floor of the New York Stock Exchange (NYSE) on Sept. 29, 2026 in New York City.
Spencer Platt | Getty Images
The S&P 500 pulled back on Wednesday, pressured by losses in the artificial intelligence trade, as investors reacted to hotter-than-expected September consumer inflation data.
The broad market index fell 1.11% to end at 7,718.94, while the Nasdaq Composite shed 1.88% to close at 26,692.87. The Dow Jones Industrial Average declined 48.62 points, or 0.09%, to 51,621.48. Gains in key healthcare stocks such as UnitedHealth and Amgen kept the 30-stock index’s losses in check.
The consumer price index rose 0.6% in September month over month, with its year-over-year gain coming in at 3.7%. While the former was in line with expectations, the latter was hotter than expected, as economists polled by Dow Jones had anticipated a 3.6% advance on the year.
Excluding food and energy prices, core CPI posted a monthly and yearly advance of 0.3% and 2.6%, respectively. Both were also slightly higher than the increase of 0.2% and 2.5% that economists had expected.
“This puts the Federal Reserve very much in play for December,” Philip Blancato, Osaic chief market strategist, told CNBC, before later noting that “we’re looking at probably a core CPI next year of 3%” given the impact of higher oil prices.
The report comes as oil prices remain elevated and consumers pay more for gasoline, which is averaging at $4.33 a gallon, compared to about $3.08 per gallon a year earlier, according to AAA. Last week, President Donald Trump announced he would temporarily ease restrictions on Russian diesel fuel exports, but analysts don’t believe the deal will do much to lower fuel prices for truckers and farmers.
U.S. oil prices moved higher Wednesday, with West Texas Intermediate futures settling up 1.01% at $95.09 per barrel.
Still, Blancato isn’t “overly concerned” about the equity or bond markets, as he views the latest rise in inflation as “transitory.” He continued, “I think a lot of this has already been priced in.”
In addition to worries about inflation, investors’ concerns about technology companies outside of the “Magnificent Seven” using too much debt to fuel the AI boom came to the fore. Shares of CoreWeave plummeted more than 15%, while others like Oracle declined almost 9%.
Chip stocks also added to their recent declines. Micron Technology, which shed more than 3% in the prior trading day, dropped 4%. Advanced Micro Devices and Sandisk moved down more than 5%, while Intel lost 4%.
Beyond tech, Bank of America shares declined almost 5% after the banking giant’s third-quarter revenue missed expectations. BofA has also been hit with more than $1.2 billion in federal penalties, with regulators saying the bank failed to report more than $5 billion in “suspicious” transactions. Morgan Stanley‘s latest quarterly results, meanwhile, topped expectations, though the stock was ended the session nearly 3% lower.
