Hot US inflation data triggers broad market selloff

US consumer prices rose 3.7% year-over-year in September, exceeding the 3.6% forecast, with core inflation at 0.33% month-over-year versus the expected 0.2%. This data pushed the probability of a December Federal Reserve rate hike to 87%, triggering a sharp correction in equity markets. The S&P 500 fell 1.1% to 7,719 points, ending a six-year streak without a daily loss of 1% or more. The Nasdaq 100 dropped 2.0% to 29,950 points, and the Russell 2000 fell 1.9%, entering correction territory.

Technology stocks bore the brunt of the selling. The semiconductor index fell 4.3%, marking its sixth consecutive losing day. ASML shares dropped nearly 4% in New York despite strong earnings that showed customer orders for 2029 and 2030 machines. Server makers Dell and HPE fell 11% and 8% respectively after Barclays downgraded them, noting that companies allocate only 5% of IT budgets to AI. CoreWeave stock fell over 10% after a viral post highlighted its bond yield reaching around 15%, prompting a "Yikes" response from Elon Musk. Bank of America stock dropped 5% due to a fine of over $1 billion for anti-money laundering violations and disappointing earnings. In contrast, Apple became the second company, after Nvidia, to exceed a $5 trillion market cap, closing up 0.5%. BlackRock reported net inflows of over $205 billion, bringing total assets under management to $15.5 trillion.