Stocks fall, yields rise as inflation data comes in hotter than expected

Stocks fell in the United States on Oct. 12 as newly released inflation data overshot expectations. The Dow Jones Industrial Average fell by 173.73 points (0.51%) to 33,631.14. The S&P 500 declined by 27.34 points (0.62%), ending the day at 4,349.61. The tech-heavy Nasdaq index lost 85.46 points (0.63%), declining to 13,574.22.

*One-day S&P 500 chart for Oct. 12. Source: MSN Money*

At 8:30 am Eastern Time, the U.S. Bureau of Labor Statistics released Consumer Price Index data for the month of September. It showed that prices increased 0.4% over the course of the month and 3.7% in the year preceding Oct. 1. This was higher than the 0.3% for the month and 3.6% year-over-year estimated by Dow Jones. Traders interpreted the higher-than-expected figure as bearish for equities, as it could imply that the Federal Reserve will need to keep interest rates elevated for longer than previously expected as they attempt to keep inflation under control.

Despite this decline in the overall market, shares of some retail-sector companies did unusually well. Walgreens gained 7% after it reported that its losses had not been as great as previously expected, and Dollar General stock surged by nearly 10% after-hours as the company announced that former CEO Todd Vasos would return to the company.

U.S. Treasury yields rose as traders digested the new inflation data. The 10-year note gained 0.102 points, reaching 4.699%. The two-year gained 0.066 points, rising to 5.071%.

Gold fell by $6.52 per troy ounce to 1,868.93. Gold has been trending down since May 4, when it peaked at $2,060.60. Since then, concerns about rising interest rates and a strong dollar have kept the yellow metal in decline.

*Gold price since May, 2023. Source: Apmex*

Oil gained slightly on Oct. 12, with West Texas Intermediate adding a penny per barrel (0.012%) to its price to reach $83.50. Brent crude gained $0.56 (0.65%) per barrel to reach $86.38.

In the foreign exchange market, the U.S. Dollar Index rose 0.76 points to 106.58. The euro fell 0.85% to $1.0528. The yen fell 0.47

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Author: Tom Blackstone

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