Summary
- The Nasdaq Composite fell 1.54% to 24,975.51, the steepest decline among major indexes.
- Producer prices climbed 0.3% in October, lifting the annual rate to 6.5%.
- Chicago Fed President Goolsbee said the central bank has more work to do on inflation.
The S&P 500 dropped 0.9% to close at 7,523.92, while the Dow Jones Industrial Average slipped a more modest 0.2% to 52,189.37. The Nasdaq bore the brunt of the selling, falling 1.54% to 24,975.51 as technology shares led losses. All three indexes remain well below their 52-week highs, with the S&P 500 roughly 4% off its peak of 7,844.52 and the Nasdaq about 10% below its high of 27,722.75.
The producer price index rose 0.3% in October, slightly below the 0.4% increase economists had forecast, but the annual rate accelerated to 6.5%, the highest reading in nearly four years. The data arrived as investors had been hoping for signs that inflationary pressure was cooling enough to clear the way for further interest-rate cuts.
Chicago Federal Reserve President Austin Goolsbee said the central bank still has significant work ahead on taming inflation, telling CNBC that policymakers will likely need to respond to the latest figures. His comments reinforced market expectations that the Fed may hold a more cautious stance on rate cuts than investors had anticipated earlier in the year.
The inflation reading complicates the picture for a Fed that has been balancing persistent price pressures against signs of slowing growth. A hotter-than-expected annual rate reduces the central bank's room to maneuver and raises the risk that borrowing costs stay elevated longer than markets had priced in, a scenario that tends to weigh heaviest on rate-sensitive growth and technology stocks.
Friday's selloff reflected that dynamic, with the Nasdaq's decline far outpacing the Dow's smaller loss. Investors will now turn to upcoming Fed commentary and future inflation readings for clarity on whether Friday's data mark a temporary spike or the start of a more durable trend. Any further signs of sticky inflation could prompt the central bank to delay additional easing, a shift that would likely keep volatility elevated across equity markets in the weeks ahead.