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S&P 500 and Nasdaq Drop to Two-Month Lows as Hot Inflation Data and Chip Sell-Off Weigh on Markets

BearishHigh impact
SPX7,718.94 −1.11%NDX29,950.82 −2.02%

U.S. stock indexes fell sharply on Wednesday, marking the largest single-day loss for the S&P 500 (SP:SPX) and Nasdaq-100 Index (NASDAQ:NDX) in over two months. The S&P 500 slipped 1.1% while the Nasdaq-100 dropped 2.0%. The Dow Jones Industrial Average eased 0.1% and the Russell 2000 dropped 2.0%. Semiconductor stocks dragged down the tech sector, with chipmakers like Micron Technology Inc. (MU), Nvidia Corp. (NVDA), and Broadcom Inc. (AVGO) suffering heavy losses.

The market decline was driven by higher-than-expected September consumer inflation data, which heightened fears of further interest rate hikes by the Federal Reserve. Consumer prices rose 0.6% month-over-month and 3.7% year-over-year, beating estimates. Core inflation also topped projections, rising 0.3% over the prior month and 2.6% annually, largely propelled by higher energy costs as gasoline averaged $4.33 per gallon.

Looking ahead, investors are tracking key technology trends and monetary policy cues. Apple Inc. (AAPL) is scheduled to release its AI tools in China in December, while artificial intelligence firm Anthropic PBC reported $16.8 billion in third-quarter revenue ahead of a planned initial public offering. Markets will focus on upcoming central bank decisions and inflation trends to see if interest rate pressures persist.

Key points

  • The S&P 500 dropped 1.1% and the Nasdaq-100 fell 2.0%, recording their worst single-day performances in more than two months.
  • September consumer price index rose 3.7% year-over-year, topping forecasts and raising expectations for Federal Reserve rate hikes.
  • Semiconductor stocks posted steep losses, with major chipmaker ETFs dropping between 4% and 5% during the session.
  • Apple Inc. plans to launch its artificial intelligence platform in mainland China in December after previous regulatory delays.
  • Core CPI increased 2.6% annually, driven higher in part by gasoline prices averaging $4.33 per gallon.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why did the S&P 500 and Nasdaq drop on Wednesday?

The stock indexes fell after September consumer inflation data exceeded projections, raising concerns that the Federal Reserve will increase interest rates. A sharp decline across semiconductor stocks also pressured the tech sector.

What were the September US CPI inflation figures?

The consumer price index rose 0.6% from the prior month and 3.7% annually, exceeding the projected 3.6% gain. Core inflation increased 0.3% month-over-month and 2.6% year-over-year, slightly above expectations.

When will Apple launch its AI platform in China?

Apple Inc. plans to launch its artificial intelligence platform in mainland China in December following extended regulatory delays.