US stocks pull back from record after inflation data

The S&P 500 slid 0.2% after rallying to another record high on Wednesday. The Nasdaq 100 was down 0.1%, while the Russell 2000 was down 0.6%.

Economic data released on Thursday morning showed higher-than-anticipated inflation alongside a softening labor market. The headline consumer price index was 2.4% more than a year ago, a drop from last month’s 2.5% but was still more than Wall Street expected. The weekly jobless claims surged to the highest level since August 2023 due to the impact of Hurricane Helene as well as the Boeing strike. 

Yields on 10-year Treasury bonds, which affect mortgage rates and other consumer borrowing costs, rose slightly to above 4%. The 2-year Treasury yields, which are more sensitive to policy changes like interest rate cuts, were down. Traders are now pricing in a slightly higher chance of a 25-basis-point rate cut during the Federal Reserve’s November meeting compared to Wednesday.

Most S&P 500 sectors retreated, but the energy sector logged a 0.7% gain. It joined an oil rally that pushed crude oil prices up after two straight sessions of losses, as Israeli troops reportedly fired at UN peacekeepers in Lebanon. The US benchmark WTI crude future settled up 3.6%, while the global benchmark Brent crude climbed 3.7% at settlement. 

Megacap stocks were mixed. Nvidia was up 1.6%, while Tesla fell 1%, hours before a long-awaited robotaxi event.