Stock market today: Indexes close lower after CPI shows sticky inflation in September

Stocks fell on Thursday from records reached in the previous session, as traders took in a sticky inflation reading for September.

All three benchmark indexes fell, with the Dow Jones Industrial Average down TK points, a 0.40% fall, while the S&P 500 and Nasdaq fell 0.% and 0.%, respectively.

The declines follow rises across the board on Wednesday, which saw a fresh record close for both the S&P 500 and the Dow, and comes after inflation proved stickier than expected last month.

September consumer price index data released on Thursday showed inflation rose 2.4% year-over-year, slightly above consensus forecasts of a 2.3% rise.

The core CPI reading, which excludes more volatile food and energy costs, was up 3.3% year-over-year and just above forecasts of 3.2%.

The reading, coupled with last week’s blockbuster jobs report, has sparked talk of a “no landing” scenario for the US economy, a scenario in which strong economic growth fuels inflation and makes it harder for the Federal Reserve to cut rates.

A no landing would likely mean rate cuts are fewer or slower than markets had previously forecast. It would also mean borrowers are saddled with higher interest rates on their debt for longer.

After the CPI release, investors adjusted their expectations for the Federal Reserve’s easing cycle. The September jobs report had killed the odds of another big 50 basis point cut, but the slightly higher-than-expected CPI likely isn’t enough to fully pump the brakes on Fed easing.

“Heading into the report, we thought only a very firm print would lead the Fed to consider pausing in November based on inflation alone. We did not get that,” analysts from Bank of America said Thursday.

“While core PCE will be firmer than recent months, we think it will be enough for the Fed to follow through with a 25bp cut in November,” they added.

Investors are now pricing in higher odds of a 25 basis point rate cut at the central bank’s meeting next month, according to the CME FedWatch Tool.

Meanwhile, weekly jobless claims edged up 33,000 to 258,000, according to Labor Department data released Thursday. That number marks its highest level in over a year and outpaced forecasts of 230,000.

Here’s where US indexes stood shortly after the closing bell on Thursday:

• S&P 500: 5,780.05, down 0.21%

• Dow Jones Industrial Average: 42,454.12, down 0.14% (-57.88 points)

• Nasdaq composite: 18,282.05, down 0.05%

Here’s what else is going on:

• Inflation is scrambling Americans’ perceptions of middle-class life, making the economy seem worse than it really is.

• Insurance companies face massive losses, but catastrophe bond investors won’t see huge damages in the wake of Hurricane Milton.

• Jamie Dimon says the “Buffett Rule” approach to taxing the wealthy could solve America’s debt problem.

In commodities, bonds, and crypto:

• Oil futures rose. West Texas Intermediate crude rose 3.7% to $75.93 a barrel. Brent crude, the international benchmark, climbed 3.7% to $79.44 a barrel.

• Gold rose 0.8% to $2,646.7 an ounce.

• The 10-year Treasury yield was about flat at 4.07%.

• Bitcoin fell 2% to $59,654.