U.S. stocks closed lower on Wednesday as hotter-than-expected September inflation data weighed on investor sentiment, while renewed selling in artificial intelligence-related stocks intensified market losses.
The S&P 500 dropped 1.11% to finish at 7,718.94, while the Nasdaq Composite slid 1.88% to 26,692.87. The Dow Jones Industrial Average edged down 48.62 points, or 0.09%, to close at 51,621.48. Gains in major healthcare companies, including UnitedHealth and Amgen, helped limit the Dow’s decline.
September’s Consumer Price Index (CPI) increased 0.6% month over month, matching forecasts, while annual inflation accelerated to 3.7%, exceeding economists’ expectations of 3.6%. Core CPI, which excludes food and energy, rose 0.3% monthly and 2.6% annually, both slightly above the projected increases of 0.2% and 2.5%, respectively.
Persistent inflation concerns were compounded by elevated oil prices and rising gasoline costs. According to AAA, the average U.S. gasoline price reached $4.33 per gallon, compared with approximately $3.08 a year earlier. Although President Donald Trump recently announced a temporary easing of restrictions on Russian diesel exports, analysts remain doubtful that the move will significantly reduce fuel costs for truckers and farmers.
Meanwhile, U.S. crude prices continued to climb, with West Texas Intermediate (WTI) futures settling 1.01% higher at $95.09 per barrel.
Technology stocks faced additional pressure as investors grew increasingly concerned about the debt used by companies outside the “Magnificent Seven” to finance their AI expansion. CoreWeave shares plunged more than 15%, while Oracle fell nearly 9%. Semiconductor stocks also extended their recent losses, with Micron Technology dropping 4%, AMD and Sandisk falling more than 5% each, and Intel declining 4%.
Outside the technology sector, Bank of America shares slid nearly 5% after its third-quarter revenue fell short of expectations. The bank also faced more than $1.2 billion in federal penalties following regulatory allegations involving failures to report suspicious transactions exceeding $5 billion. Morgan Stanley reported quarterly results that beat expectations, but its shares still ended the session almost 3% lower.
Overall, persistent inflation, rising energy costs and concerns about debt-financed AI investments weighed on market sentiment, leaving investors cautious about the outlook for equities.
