Investing.com -- U.S. stocks fell Thursday as inflation data came in stronger than expected, presenting a potential dilemma for Federal Reserve officials as they consider further possible interest rate reductions this year.
At 08:50 ET (12:50 GMT), the Dow Jones Industrial Average was 100 points, or 0.2%, lower, the S&P 500 fell 16 points, or 0.3%, and the NASDAQ Composite dropped 67 points, or 0.4%.
CPI data ahead of expectations
Headline inflation in the US slowed on an annualized basis in September, but was still faster than expectations, providing the Federal Reserve with less impetus to cut interest rates at a fast pace.
The consumer price index (CPI), a crucial gauge of US headline inflation, decelerated to 2.4% versus 12 months ago, down from 2.5% in August. Economists had seen the figure at 2.3%.
Month-on-month, the reading matched August's pace of 0.2%. It was tipped to cool slightly to 0.1%.
Q3 earnings season set to begin
Focus this week is also on the third-quarter earnings season, with a string of major banks set to report on Friday.
JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Bank of New York Mellon (NYSE:BK) are set to report third-quarter earnings on Friday, while Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC) and Citigroup (NYSE:C) will report earnings next week.
Earnings from Johnson & Johnson (NYSE:JNJ), Unitedhealth Group (NYSE:UNH) and Walgreens Boots (NASDAQ:WBA) are also due early next week.
Ahead of this, Delta Air Lines (NYSE:DAL) stock fell 1% after the carrier unveiled current-quarter earnings guidance that missed analysts expectations, as it grapples with the fallout from a summer computer network outage and pricing pressures from overcapacity.
The company said it now expects to report fourth-quarter adjusted earnings per share of between $1.60 to $1.85, missing Wall Street estimates of $1.78 at the midpoint, according to Bloomberg News.
Crude rises as Milton hits Florida
Oil prices rose Thursday as Hurricane Milton hit Florida hard, adding to worries about potential supply disruptions in the Middle East.
By 09:35 ET, the Brent contract climbed 1.4% to $77.67 per barrel, while U.S. crude futures (WTI) traded 1.5% higher at $74.34 a barrel.
Both contracts have fallen around 5% over the last two sessions.
In the US, Hurricane Milton has made landfall in Florida, and while the storm has largely dodged the oil infrastructure in the Gulf of Mexico it has already driven up demand for gasoline in the state, which has helped support crude prices.
Additionally, traders remained on edge over a potential escalation in the conflict in the Middle East, especially if Israel targets Iran’s oil facilities.