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Markets·Wednesday, Oct. 14·After the close

Hot inflation report sends tech stocks sliding

Stocks fell Wednesday after a hotter-than-expected inflation report made another Federal Reserve rate hike look more likely, with tech and small companies hit hardest.

Written and checked by software

The story

Bloomberg reported that September prices rose at the fastest pace since April, driven by fuel. That pushed investors to bet the Fed will raise interest rates again. The Nasdaq fell almost 1.9%, and the S&P 500 dropped about 1.1%. The Dow was roughly flat.

Chip and AI stocks took the worst of it. Bloomberg reported that worries about rates, stretched prices and AI debt fed the selloff, and CoreWeave's bonds fell to distressed levels. Nvidia lost about 3.2%. Small companies fell even more, with the Russell 2000 down about 2.1%. That's probably because small firms lean more on borrowing, so higher-rate bets hurt them most. The Dow likely held up because it has less tech, and Apple rose.

Oil rose about 1% to around $95 a barrel after a cargo ship sank in the Strait of Hormuz, Bloomberg reported. Iran is stepping up attacks on shipping. Record diesel prices are feeding inflation, which is bad news for Maine homes that heat with oil as winter nears. Silver fell more than 6%, probably because a stronger dollar and rate-hike bets hurt metals that pay no interest.

Also today

  • Bank of America slid after missing earnings estimates and facing about $1.2B in fines over money-laundering lapses, Bloomberg reported.
  • Mortgage rates hit 7.5%, and applications to buy a home fell for a sixth straight week, Bloomberg reported, citing the Mortgage Bankers Association.

Storylines

  • Inflation and Fed hike odds: Hot prices, plus a Beige Book (the Fed's regular survey of business conditions) showing them intensifying, make a hike at the meeting in two weeks a live question.
  • AI spending and debt worries: The chip selloff deepened, and CoreWeave's stock and bonds plunged on borrowing fears.
  • Iran war and oil: A ship sank in Hormuz, oil climbed and diesel hit records.
  • Housing squeeze: Mortgage rates near 7.5% keep squeezing buyers, and the buying slump is now in its sixth week.

Temperature

Neutral ยท uneasy: The market's fear gauge jumped 10% and most stocks fell, but it's still in a normal range and the S&P 500 sits less than 2% below its high.

Where this came from

Written by software from that day's market data and the headlines cited below, checked against the numbers by code, and published without a person's review. Nothing here is advice.