US stocks fall after September hotter inflation muddies rate cut outlook

Investing.com -- U.S. stocks fell Thursday as stronger-than-expected inflation data muddied the outlook for Federal Reserve rate cuts.  

At 12:58 p.m. ET (16:58 GMT), the Dow Jones Industrial Average was 111 points, or 0.3%, lower, the S&P 500 fell 0.2%, and the NASDAQ Composite dropped 0.2%. CPI data comes in hot, cooling bets on big rate cuts 

Headline inflation in the US slowed on an annualized basis in September, but was still faster than expectations, providing the Federal Reserve with less impetus to cut interest rates at a fast pace. 

The consumer price index (CPI). was 0.2% in September, unchanged rom August but above the 0.1% expected. That took the annual pace through August to 2.4%, down from 2.5% in August, but above expectations of 2.3%.

Core CPI, which strips out food and energy and is closely watched by the Fed, rose at 0.3%, taking the annual pace through September to 3.3%, topping economists estimates of 2.3%. 

"With a further emphasis back towards inflation, investors appear to be “recalibrating” their outlook for rate cuts, reducing expectations for a second-round outsized 50bp cut in November and sending the 10-year back over 4% for the first time since July," Stifel said in a Thursday note. Banks to kick off Q3 earnings season; Delta falls on guidance; Tesla robotaxi event eyed

Focus this week is also on the third-quarter earnings season, with a string of major banks set to report on Friday. 

JPMorgan Chase (NYSE:JPM ), Wells Fargo (NYSE:WFC ) and Bank of New York Mellon (NYSE:BK ) are set to report third-quarter earnings on Friday, while Goldman Sachs (NYSE:GS ), Bank of America (NYSE:BAC ) and Citigroup (NYSE:C ) will report earnings next week.

Earnings from Johnson & Johnson (NYSE:JNJ ), Unitedhealth Group (NYSE:UNH ) and Walgreens Boots (NASDAQ:WBA ) are also due early next week.

Ahead of this, Delta Air Lines (NYSE:DAL ) stock fell 0.3% after the carrier unveiled current-quarter earnings guidance that missed analysts expectations, as it  grapples with the fallout from a summer computer network outage and pricing pressures from overcapacity.

The company said it now expects to report fourth-quarter adjusted earnings per share of between $1.60 to $1.85, missing Wall Street estimates of $1.78 at the midpoint, according to Bloomberg News.

GXO Logistics Inc (NYSE:GXO ) fell more than 14% after Bloomberg reported, citing unnamed sources, that the company is mulling a sale. The report suggested , however, that a decision hasn't yet been made.

Tesla Inc (NASDAQ:TSLA ) was little changed as investors awaited the EV maker to unveil its robotaxi at an event Thursday.   (Peter Nurse, Ambar Warrick contributed to this article.)

Source: Investing.com