Wall Street Reacts to Hotter-Than-Expected Inflation Data

Wall Street opened lower on Thursday after inflation data exceeded expectations, reinforcing a potential Fed rate hike. The Consumer Price Index rose 0.2% monthly and 2.4% annually, with markets adjusting to the possibility of steady rates. Jobless claims increased, adding complexity to market predictions.

Wall Street opened on a downbeat note Thursday as higher-than-anticipated inflation figures for September bolstered expectations for a September interest rate hike by the Federal Reserve. The Consumer Price Index experienced a 0.2% rise monthly and a 2.4% increase annually, both surpassing economists' estimates.

The core measure, excluding food and energy costs, climbed 3.3% compared to the forecast of 3.2%. As a result, major indexes like the Dow Jones and Nasdaq experienced drops, while rate-sensitive stocks, particularly in Real Estate and Information Technology, faced declines amidst increasing predictions of reduced Federal Reserve support.

Rising jobless claims further muddied market outlooks, with investors closely watching the implications for the Fed's future policy decisions. While air travel stocks like Delta and United also dipped, signs of market unease continued to emerge as earnings season approached and external influences, such as Hurricane Milton, loomed on the horizon.

(With inputs from agencies.)