Wall Street equities plunged on Wednesday after higher-than-expected US September consumer price inflation (CPI) sparked fears of prolonged Federal Reserve rate hikes, pressuring AI infrastructure beneficiaries and bank stocks sensitive to rising capital costs.
📌 Key Market Numbers & Index Performance:
• Nasdaq (-1.66%): Led market losses, dropping 452.67 points to 26,751.71.
• S&P 500 (-1.10%): Shed 86.06 points to 7,719.86, while the Dow Jones (-0.30%) held up better due to defensive sector gains.
• 60% Rate-Hike Probability: Traders now price a 60% chance of a Fed rate hike (up from 21.6% pre-CPI report), with analysts expecting further rate increases in December and early 2027.
• AI & Cloud Stocks Hit Hard: Hyperscaler Oracle (-7.8%), neocloud firms CoreWeave (-11%) and Nebius (-11%), alongside server makers Dell (-11.5%) and HP (-7.8%) suffered heavy selloffs.
• Bank Earnings Drag: Bank of America fell 5.3% after setting aside $1.2B for regulatory fines, while Morgan Stanley dipped 3.5%, sending the S&P 500 Banks index to a 4-month low.
💡 Market Rotation: As tech and semiconductor stocks fell, investors rotated into traditional defensive havens, driving gains in Consumer Staples (+1.7%) and Healthcare (+2.1%). Meanwhile, Bending Spoons surged 40% following a new $330M investment from Berkshire Hathaway.