The stock market exhibited uncertainty on Wednesday, with major indices fluctuating throughout the trading day, recovering from the downturn experienced in the previous session. By the day's end, the results were mildly mixed. The Nasdaq, heavily comprised of tech stocks, slipped by 50.66 points, or 0.3%, closing at 19,230.74. Meanwhile, the S&P 500 rose slightly by 1.39 points, or less than 0.1%, to 5,985.38, and the Dow Jones inched up by 47.21 points, or 0.1%, to finish at 43,958.19.
This indecisive trading followed the release of significant consumer price inflation data that aligned with economists' predictions. The Labor Department reported a 0.2% increase in its consumer price index for October, mirroring the growth seen over the past three months and matching expectations. The annual rate of consumer price growth accelerated to 2.6% from September's 2.4%, also in line with forecasts.
Excluding volatile food and energy prices, core consumer prices rose by 0.3% in October, consistent with previous months and projections. Meanwhile, the annual core consumer price growth rate remained steady at 3.3%, which also met expectations.
Though the data bolstered confidence that the Federal Reserve will proceed with lowering interest rates next month, the persisting inflation led to ambiguity about further rate reductions. Quincy Krosby, Chief Global Strategist at LPL Financial, remarked that the 2.6% year-over-year figure, while anticipated, might prevent the Fed from prematurely declaring success in its efforts to curb inflation.
According to CME Group's FedWatch Tool, there is an 82.3% probability of another quarter-point rate cut in December, coupled with a 60.2% likelihood that rates will remain unchanged in January.
**Sector Overview**
Airline stocks experienced notable weakness, with the NYSE Arca Airline Index plunging 7.3%, further retreating after reaching its highest closing level in over a year on Monday. The decline was exacerbated by Spirit Airlines' shares taking a 59.3% nosedive following a Wall Street Journal report indicating Spirit's impending bankruptcy filing after failed merger discussions with Frontier Airlines.
Semiconductor stocks also saw significant declines, as indicated by the Philadelphia Semiconductor Index's 2.0% drop. Similarly, oil service, steel, and computer hardware stocks faced substantial weakness, in contrast to oil producer and retail stocks, which recorded strong gains.
**Global Markets**
In overseas trading, the Asia-Pacific region's stock markets mostly slid on Wednesday. Japan's Nikkei 225 Index declined by 1.7%, and Hong Kong's Hang Seng Index fell by 0.1%. European markets closed narrowly mixed; the UK's FTSE 100 Index edged up by 0.1%, while France's CAC 40 Index and Germany's DAX Index dipped by 0.1% and 0.2%, respectively.
In the bond market, U.S. Treasuries fell modestly after exhibiting early strength. The yield on the benchmark ten-year note rose by 1.9 basis points, reaching a four-month closing high of 4.451% after a low of 4.359%.
**Outlook**
On Thursday, market attention is expected to focus on reports concerning producer price inflation and weekly jobless claims, along with remarks from Federal Reserve Chair Jerome Powell.
