US Inflation Jump Drags Wall Street Lower While European Stocks Rise

US annual consumer price inflation (CPI) rose to 3.7% in September, higher than analysts had expected. In the previous two months the figure stood at 3.4%. The data weighed on US stock markets on Wednesday, while the main European indexes moved up. The rise in inflation was driven mainly by more expensive fuel following the war on Iran launched by the United States.

US markets

All three major US indexes declined. The tech-heavy Nasdaq Composite fell the most, by 1.9% to 26,692.87 points, mainly because of falling share prices at leading artificial intelligence companies. The Standard & Poor's 500 lost 1.1% to 7,718.94 points, and the Dow Jones Industrial Average slipped 0.1% to 51,621.48 points.

Angelo Kurkafas, an analyst at investment firm Edward Jones, said the figures were worrying enough to suggest that the interest rate increase by the US Federal Reserve in September may not be its last this year. He linked the drop in AI shares to expectations about rates. Shares of data centre operator CoreWeave fell more than 15%, and chipmakers Nvidia and AMD also dropped sharply.

Bank of America shares lost 4.8% after the US Treasury Department imposed fines of more than $1.2 billion on the bank for violations of anti-money-laundering monitoring and sanctions rules. Shares of German airline group Lufthansa declined 2.2% after Portugal announced that the group had gained the right to buy 44.9% of the national carrier TAP Air Portugal.

Europe and other markets

London's FTSE 100 rose 0.7% to 10,724.86 points, Paris's CAC 40 gained 0.6% to 7,873.11 points, and Frankfurt's DAX 30 added 0.2% to 25,298.61 points.

Oil prices climbed. WTI crude in New York increased 1.0% to $95.09 a barrel, while Brent in London rose 0.4% to $106.06. Natural gas on the Dutch Title Transfer Facility (TTF) hub slipped 0.1% to 87.14 euros per megawatt-hour.

The euro fell against the dollar from 1.1199 to 1.1147, and the British pound dropped from 1.3255 to 1.3189 dollars. The dollar edged up against the Japanese yen from 158.33 to 158.37.