US stocks opened lower on Wednesday after hotter-than-expected inflation figures unsettled investors and raised concerns that the Federal Reserve could increase interest rates again.
The S&P 500 fell 0.4%, losing 32 points to 7,773, while the technology-heavy Nasdaq Composite declined 0.5% as selling pressure weighed on American equities.
The US dollar surged to its highest level in 18 months on Wednesday after stronger-than-expected inflation figures increased expectations that the Federal Reserve could raise interest rates again.
The US Dollar Index, which measures the greenback against a basket of six major currencies, climbed 0.5% to around 102.65, reaching its strongest level since April 2025.
The rally followed the release of US consumer price inflation data showing annual inflation increased to 3.7% in September, exceeding market expectations of 3.6% and rising from 3.4% in August.
Monthly consumer prices increased 0.6%, while core inflation, which excludes volatile food and energy costs, rose to 2.6%, suggesting price pressures are spreading beyond higher fuel costs.
The stronger inflation reading prompted investors to reassess the outlook for US monetary policy, with expectations of another Federal Reserve interest rate increase strengthening ahead of its October meeting.
US Treasury yields climbed following the figures, reflecting concerns that borrowing costs could remain elevated for longer than previously anticipated.
Technology stocks remain particularly sensitive to rising bond yields, as higher financing costs can weigh on valuations and investment spending.
The inflation surprise also comes amid heightened concerns over energy prices and their impact on businesses and consumers.
Investors will now focus on the Federal Reserve’s response to persistent inflation, with further economic data and central bank commentary likely to influence trading sentiment in the coming sessions.
