US stocks fall, dollar rallies as inflation tops forecasts

US stocks fell and the dollar rallied Wednesday after US consumer prices rose more than expected in September, reinforcing expectations the Federal Reserve may raise interest rates as soon as this month. Core CPI rose 0.3% in September versus forecasts of 0.2%, with the annual rate at 2.6% above estimates. The dollar gained 0.68% to its highest since April 2025, while 2-year Treasury yields jumped 7.2 basis points to 4.87%. Traders raised bets on a Fed rate hike this month to around 41% from 20% prior to the data. The Dow fell 0.17%, the S&P 500 fell 0.94%, and the Nasdaq fell 1.3%, with oil prices near $106 a barrel following attacks on vessels in the Strait of Hormuz.