Stocks drift lower as inflation data keeps rate-cut bets in check
Treasury yields eased while tech led a quiet session ahead of next week’s earnings wave.
US stocks ended a choppy session slightly lower on Thursday after consumer prices rose faster than economists expected in September, pushing back the timing of the Federal Reserve’s next rate cut.
The S&P 500 slipped 0.08% to 7,732.50, while the Nasdaq 100 fell 0.26%. The Dow Jones Industrial Average was little changed. Losses were concentrated in semiconductor stocks, where a downgrade of Dell Technologies revived questions about how long the AI spending boom can last.
“The market isn’t worried about a recession. It’s worried that rates stay high long enough to squeeze valuations.”
Yields ease after early jump
The 10-year Treasury yield briefly climbed above 4.10% after the report before settling at 4.03% by the close. Futures markets now put the odds of a December cut at about 38%, down from 55% a week ago.
Healthcare was the best-performing sector, lifted by Eli Lilly’s 3.5% gain on strong results from its oral weight-loss drug. Energy lagged as crude oil fell 1.7% on rising US inventories.
What to watch next week
Earnings season moves into high gear with Netflix on Tuesday and Tesla on Wednesday. The European Central Bank meets on Thursday, where policymakers are expected to hold rates at 2%.