Nasdaq ends sharply lower as hot inflation data stirs rate hike worries
Eight of the 11 S&P 500 sector indices decline, led by information tech and communication services
Published Thu, Oct 15, 2026 · 05:48 AM
[BENGALURU] Hotter-than-expected inflation data sent the Nasdaq to a sharply lower close on Wednesday (Oct 14), with worries about more interest rate hikes from the US Federal Reserve pummelling shares of Oracle, CoreWeave and other artificial intelligence stocks sensitive to higher borrowing costs.
Increased bets that the Fed will need more rate hikes to tame inflation dealt a sharp blow to some of the market’s biggest gainers of 2026. Oracle lost 8.8 per cent, while AI-infrastructure firms CoreWeave and Nebius tumbled 15 per cent and 10 per cent, respectively.
Dell and Hewlett Packard Enterprise sank 11.4 per cent and 8.2 per cent, respectively, after Barclays downgraded the AI server makers to “equal-weight” from “overweight”.
The Philadelphia Semiconductor Index dropped 4.3 per cent, down for a sixth straight session, its longest losing streak since May 2025.
US consumer prices accelerated in September as the cost of petrol surged and price pressures broadened beyond energy, data from the Labor Department’s Bureau of Labor Statistics showed.
Interest rate traders are pricing in a 37 per cent chance that Fed policymakers will raise rates in October, up from 22 per cent on Tuesday, according to CME’s FedWatch tool.
“Investors are not happy with the report because that puts pressure on the Fed to raise rates to combat inflation,” said Adam Sarhan, chief executive of 50 Park Investments, in New York. “Inflation remains public enemy number one for the market and for the Fed.”
The S&P 500 declined 1.11 per cent to end the session at 7,718.94 points, its biggest one-day drop since Jul 29.
The Nasdaq declined 1.88 per cent to 26,692.87 points, its biggest daily drop since Jul 23. The Dow Jones Industrial Average declined 0.09 per cent to 51,621.48 points.
Eight of the 11 S&P 500 sector indices declined, led lower by information technology, down 2.6 per cent, followed by a 1.78 per cent loss in communication services.
Volume on US exchanges was relatively heavy, with 18.0 billion shares traded, compared to an average of 17.6 billion shares over the previous 20 sessions.
After hitting a record high last week, the S&P 500 remains up almost 13 per cent in 2026, with most of that gain fuelled by AI-related stocks. The median S&P 500 stock has gained 4 per cent in 2026, and over 200 of the index’s components are in negative territory.
Bank of America fell 4.8 per cent. The lender’s profit fell in the third quarter as it set aside US$1.2 billion to cover regulatory fines for failures to detect potential money laundering. Morgan Stanley dropped almost 3 per cent, despite a rise in quarterly profit.
The S&P 500 Banks index dipped 0.7 per cent to its lowest close since June.
Before the inflation data was released, Fed vice-chair for Supervision Michelle Bowman said the central bank had time to wait and see how markets and the economy evolve after its September rate hike before deciding further action.
Bending Spoons rallied 41 per cent after Berkshire Hathaway invested another US$330 million in the owner of Vimeo and AOL, a big endorsement from the high-profile investor whose moves traders closely follow.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.1-to-one ratio.
The S&P 500 posted 15 new highs and 11 new lows; the Nasdaq recorded 27 new highs and 521 new lows. REUTERS
