STORY: Wall Street’s main indexes closed lower on Wednesday after the latest inflation data sparked concerns that the Federal Reserve may move slowly on rate cuts next year.
The Dow dipped three-tenths of a percent, the S&P 500 shed almost four-tenths and the Nasdaq lost six-tenths of a percent.
The latest inflation data showed prices ticked up slightly in October, putting the annual inflation rate at 2.3%.
Those numbers were in line with expectations, leading most traders to bet the Fed will cut rates at its December policy meeting.
But Sam Stovall, chief investment strategist at CFRA Research, said cuts may come at a slower, quarterly pace in 2025.
“I think that the shift to the quarterly reduction is because the Fed acknowledges that the economy is remaining fairly resilient, is not in need of rate cuts, implying that we’re not on the precipice of recession. And at the same time I think they want to keep their powder dry if in case the economy does show a quicker demise. So right now the Fed does not want to keep rates high for too long, thereby strangling economic growth, but at the same time it doesn’t want to end up re-stimulating inflation.”
Stocks on the move Wednesday included Dell, which slumped 12%, and HP, down almost 6%, after downbeat quarterly forecasts from the personal computer makers.
The sentiment spread to Nvidia and Microsoft, which both closed lower.
And Workday slipped more than 6% after forecasting fourth-quarter subscription revenue below expectations, hit by weaker client spending on its human capital management software.
Markets will be closed Thursday for the Thanksgiving holiday.
