S&P 500, Nasdaq See Worst Day In Over Two Months As Chipmaker Rout Deepens, CPI Data Comes In Hot — AAPL, SPCX, DRAM, SOXX In Focus

The consumer price index rose 3.7% in September, above what economists expected.

• The S&P 500 ended Wednesday 1.1% lower, the Nasdaq 100 fell 2%, and the Dow Jones Industrial Average slipped 0.1%.
• Apple Inc. is gearing up to release its artificial-intelligence platform in mainland China.
• The iShares Semiconductor ETF saw its worst day in a month. 

The S&P 500 and the Nasdaq 100 fell on Wednesday to record their worst day in over two months, pulled down by weakness in chip stocks amid fears of possible rate hikes after consumer inflation data came in hotter than expected.

The S&P 500 ended Wednesday 1.1% lower, the Nasdaq 100 fell 2%, and the Dow Jones Industrial Average slipped 0.1%. The Russell 2000, which tracks small-cap stocks, ended 2% lower.

S&P 500 futures slipped 0.2%, while Nasdaq-100 futures dropped 0.7%. Dow Jones Industrial Average futures rose just 22 points.  

The SPDR S&P 500 ETF (SPY) fell 1.4%, the SPDR Dow Jones Industrial Average ETF (DIA) eased 0.1%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) eased 2.8%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) fell 4%, and the iShares Semiconductor ETF fell 5% amid weakness in Micron Tech (MU), Nvidia (NVDA) and Broadcom (AVGO) and most other chipmakers. The broader Vanguard Information Technology ETF (VGT) dropped 3.5%.

The Roundhill Memory ETF (DRAM) fell about 5% on Wednesday, with most memory chip stocks in the red. 

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

Index	Move	Close
Dow Jones Industrial Average	-0.1%	51,621.48
S&P 500	-1.1%	7,718.94
Nasdaq 100	-2%	29,950.82

September’s consumer price index climbed 0.6% from the previous month, while advancing 3.7% on an annual basis. Although monthly inflation matched forecasts, the yearly figure topped expectations, as analysts surveyed by Dow Jones had projected a 3.6% gain.

Stripping out volatile food and energy costs, core CPI rose 0.3% month-over-month and 2.6% year-over-year. These figures marginally outpaced Wall Street estimates, which called for increases of 0.2% and 2.5%, respectively.

Osaic Chief Market Strategist Philip Blancato told CNBC that the data keeps a December rate hike firmly on the table for the Federal Reserve, adding that elevated crude prices could keep core inflation near 3% next year.

Most of the inflation pressure came from elevated oil or energy prices, with prices for gasoline averaging at $4.33 a gallon, compared to about $3.08 per gallon a year earlier, according to AAA. 

Wider tech stocks suffered as the hot inflation numbers raised expectations for an interest rate hike sooner than preferred, with the market already factored in for a rate hike in December.

“Today’s report makes the chance of an October hike higher, but we still believe the Fed will hold and opt for December as the market is already doing some of the work for them,” TD Securities’ strategists Oscar Munoz and Gennadiy Goldberg told Bloomberg.

Key Trending Stocks

Barclays said on Wednesday that it believes a Tesla-SpaceX merger announcement could arrive before Tesla’s 2026 annual general meeting, at the earliest. 

Apple Inc. (AAPL) is set to launch its artificial intelligence platform in mainland China in December this year, ending an extended period of regulatory delays that temporarily excluded the tech giant's AI tools from one of its most vital global markets. 

Deepwater Asset Management’s Gene Munster and Doug Clinton on Wednesday said that Meta’s Muse personal AI agent poses a more significant long-term risk to Alphabet Inc.’s Google (GOOG, GOOGL) than OpenAI’s ChatGPT chatbot. 

Tech companies risk writing off more than $3.5 trillion in artificial intelligence infrastructure investments by the end of 2030 as aggressive AI capex vastly outpaces revenue generation, according to a report Gartner Inc. released Wednesday. 

Anthropic PBC’s third-quarter revenue has jumped to $16.8 billion as the artificial intelligence developer prepares to launch its initial public offering, Bloomberg reported, citing people familiar with the matter. 

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