US equities tumble as inflation surprise fuels AI stock sell-off
US stocks fell sharply Wednesday, with the S&P 500 down 1.1% and Nasdaq off 1.9%, their worst one-day drops since July, after hotter-than-expected CPI and a retreat in AI-related shares.
On Wednesday, U.S. equity markets posted their biggest one-day losses since July, with the S&P 500 falling 1.1% to 7,718.94 and the Nasdaq composite dropping 1.9% to 26,692.87. The decline was triggered by a consumer-price index reading that showed September inflation at 3.7% year-over-year, surpassing the 3.6% consensus, and a core CPI increase of 0.3% month-over-month. AI-related stocks bore the brunt, as Nvidia, Broadcom, AMD, Oracle, GE Vernova and CoreWeave all posted double-digit percentage losses.
The Dow Jones slipped 48.62 points, or 0.1%, to 51,621.48. Treasury yields rose, with the 10-year reaching 5.329% before settling at 5.189%, while the 2-year ended near 4.8%. Futures and CME data indicated the probability of a Fed rate hike at the Oct. 27-28 meeting rose to roughly 35%, up from 22% the day before.
Why it matters
The drop highlights how inflation surprises and AI stock volatility can quickly reshape U.S. market sentiment and Fed expectations.
How this story developed
- Oct 2 Seoul market slips modestly as US stocks close higher
- Oct 8 The market recorded a third straight day of losses.
- Oct 13 South Korean equities fell over 3% as Asian markets slipped, mirroring a 2.7% drop in a US semiconductor index and fading AI optimism.
- Oct 13 The decline continued a multi‑day slide in the index.
- Oct 14 US semiconductor index fell 2.7% and the Nasdaq 100 slipped 0.7%, widening the regional decline.
- Oct 15 The benchmark index closed at 5,554.22, its steepest drop since late July, while the tech-focused KOSDAQ also slipped 7.65%. Major chips and electronics firms such as Samsung Electronics, SK Hynix, SK Square and Samsung Electro-Mechanics posted double-digit losses. Analysts linked the rout to scepticism over AI investment returns, a negative Gartner outlook and weaker-than-expected US consumer-price data that could prompt tighter monetary policy.
- Oct 15 Regulators suspended program selling on both the KOSPI and KOSDAQ.
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