U.S. stocks post worst day since July as inflation hits 3.7%

U.S. stocks fell to their worst day since July on Wednesday after a report showed inflation accelerated to 3.7% in September, exceeding economist expectations of 3.6%. The S&P 500 dropped 1.1%, the Nasdaq slid 1.9%, and the Dow fell 0.1%. The inflation report triggered a spike in bond yields, with the 10-year Treasury briefly jumping above 5.32%, as traders raised odds of a Federal Reserve rate hike to nearly 35%. AI-related stocks led losses, with Nvidia down 3.2% and CoreWeave tumbling 15.5%, while Bank of America fell 4.8% on weak earnings. Higher fuel prices from the Iran conflict and continued consumer spending are keeping inflation elevated, though Vanguard economist Adam Schickling expects it to slow with patience. The S&P 500 closed at 7,718.94, while European markets rose and Shanghai fell 0.9%.