US Stocks Suffer Worst Day Since July as Inflation Hits 3.7%

US stocks suffered their worst day since July after the latest inflation report showed prices rising faster than expected.

Inflation accelerated to 3.7 per cent, fuelling expectations that the Federal Reserve will raise interest rates again.

The S&P 500 fell 1.1 per cent, marking its fifth loss in the six days since the index set its all-time high.

Major indexes retreat

The Dow Jones Industrial Average declined 48 points, or 0.1 per cent, while the Nasdaq composite dropped 1.9 per cent.

Stocks in the artificial-intelligence industry led the decline, putting additional pressure on the Nasdaq.

The wider market was also affected by rising yields in the bond market.

Worries increased after a report said US consumers paid more for fuel, food and other costs of living last month.

Those prices were 3.7 per cent higher overall than they were a year earlier, according to the report cited in the market update.

The latest figure was up from the 3.4 per cent inflation rate recorded in August.

It was also higher than the 3.6 per cent economists had expected.

The stronger-than-expected inflation reading mattered because it increased expectations of another interest-rate rise by the Federal Reserve.

The combination of faster inflation, higher bond-market yields and declines in technology stocks drove the broad retreat across the major US indexes.

Source: South China Morning Post