NEW YORK, Oct. 14 (Xinhua) -- U.S. stocks closed lower on Wednesday after a hotter-than-expected September inflation reading revived bets on further Federal Reserve rate hikes.
The Dow Jones Industrial Average lost 48.62 points, or 0.09 percent, to 51,621.48. The S&P 500 fell 86.51 points, or 1.11 percent, to 7,718.94, its first decline of at least 1 percent in more than 50 trading days. The Nasdaq Composite decreased 511.51 points, or 1.88 percent, to 26,692.87.
Three of the 11 primary S&P 500 sectors finished higher as investors rotated into defensive names. Health Care rose 2.44 percent and Consumer Staples added 2.38 percent, while Energy edged up 0.8 percent. Technology led declines with a 2.62 percent drop, followed by Communication Services down 1.73 percent.
The U.S. consumer price index (CPI) grew 0.6 percent month on month and 3.7 percent year on year in September, up from 0.4 percent and 3.4 percent in August, respectively, according to data released by the U.S. Bureau of Labor Statistics on Wednesday.
"Inflation remains public enemy number one for the market and for the Fed," said Adam Sarhan, CEO of 50 Park Investments.
U.S. Treasury yields were whipsawed by the inflation data. The benchmark 10-year yield spiked above 5.32 percent after the CPI report but later eased to 5.186 percent, ending lower on the day as investors fled to safer assets.
Oil prices gained ground amid Middle East supply concerns. West Texas Intermediate settled at 95 U.S. dollars a barrel, up 1.01 percent, while Brent crude settled at 106.06 dollars, up 0.35 percent.
On the corporate front, Bank of America tumbled 4.76 percent after its profit disappointed, even excluding a 1.2-billion-dollar regulatory fine. Morgan Stanley also declined despite beating estimates, while BlackRock gained after reporting record assets.
AI-linked names were hit hard as fears of higher rates mounted, with Oracle, CoreWeave, Nebius, Marvell and Advanced Micro Devices all tumbling. The Philadelphia Semiconductor Index fell 4.3 percent for a sixth straight session.
According to CME FedWatch, traders are pricing in a 37 percent chance of a Fed hike at the Oct. 28 meeting, up from 22 percent on Tuesday, with about a 91 percent chance of at least one hike by December.
