Wall Street falls as inflation data boosts rate hike bets

Summarised from 2 outlets · Updated 14 Oct, 16:38 · Archive

US stocks opened lower after inflation accelerated in September, increasing expectations of a Federal Reserve rate rise.

Wall Street's main indices fell after hotter-than-expected inflation data boosted bets of an interest rate hike. US consumer prices accelerated in September amid surging petrol costs. Traders raised their pricing of an October rate increase to 46 per cent from 21.6 per cent, according to LSEG-compiled data.

Sam Stovall, chief investment strategist at CFRA Research, said the data increased the odds of the Federal Reserve raising rates at the October meeting but that he believed they would not do so. Stovall predicted the Fed would be increasingly likely to raise rates in December given its hawkish stance on monetary policy.

Bank stocks declined sharply as markets digested third-quarter earnings. Bank of America fell 8.5 per cent after the lender's profit fell in the quarter as it set aside US$1.2 billion to cover regulatory fines. Morgan Stanley dipped 3.4 per cent despite a rise in quarterly profit. The S&P 500 banks index fell 2.4 per cent to its lowest level in over four months. Asset manager BlackRock gained 2.0 per cent after reporting a jump in third-quarter profit, helped by higher fees from managing client funds.

In early trading on Wednesday, the Dow Jones Industrial Average fell 0.06 per cent, the S&P 500 lost 0.60 per cent and the Nasdaq Composite lost 0.78 per cent. Seven of the 11 major S&P 500 sectors declined.

How it is being reported

• Wall St slides as inflation data fuels rate hike betsUS stocks have opened lower as investors digested a new inflation reading and earnings results from major banks.Perth Now · 14 Oct, 16:05
• Wall St slides as inflation data fuels rate hike betsUS stocks have opened lower as investors digested a new inflation reading and earnings results from major banks.The West Australian · 14 Oct, 16:05

In this story: Federal Reserve · Bank of America · Morgan Stanley · BlackRock · CFRA Research · United States

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