U.S. Stocks Pare Losses After Data Show Inflation Continues to Run Hot

By Liz Moyer

Investing.com -- U.S. stocks tumbled and then regained some of those losses after inflation data for September showed persistent inflation that is running hotter than expected.

At 10:30 ET (14:30 GMT), the Dow Jones Industrial Average was down 231 points or 0.8%, while the S&P 500 was down 1.3% and the NASDAQ Composite was down 1.9%.

The inflation report gives the Federal Reserve more reason to continue on its aggressive path of interest rate hikes when it meets in early November.

The consumer price index rose 8.2% for the year ending in September, a notch more than expected. Core CPI, which doesn’t include food and fuel, rose 6.6%, also a notch more than expected. 

A day earlier, data on producer prices showed inflation in that segment also rose more than expected last month.

The expectation is now that the Fed will raise rates by another 0.75 percentage point, which would be the fourth such hike in a row as it works to beat down inflation. Minutes from its meeting in September showed the policymakers are determined to beat inflation, despite the risk of pain in the economy.

Investors are shedding risk assets as a result. 

Applied Materials Inc (NASDAQ:AMAT) shares fell 2.2% after it warned on revenue for the fiscal fourth quarter, saying new rules about exports to China would cut into results. 

Walgreens Boots Alliance Inc (NASDAQ:WBA) shares rose 1.7% after it beat expectations and raised its outlook for sales.

Oil fell. Crude Oil WTI Futures was down 0.6% to $86.72 a barrel and Brent Oil Futures was down 0.3% to $92.20 a barrel. Gold Futures fell 1.4% to $1653.