Stock Market Today: Markets React to Inflation and Daily Market Wrap
US stocks traded mixed on Wednesday as investors took in last month's inflation report, which showed an unexpected increase in the monthly core consumer price index. The Dow Jones Industrial Average was down more than 400 points shortly after the opening bell. Bond yields rose as traders readjusted expectations for a jumbo rate hike of 50 basis points at next week's Federal Open Market Committee meeting. August inflation came mostly in line with economists' expectations, with the consumer price index rising 2.5% year-per-year last month — the slowest pace of inflation recorded since February 2021. But core inflation, which excludes more volatile food and energy prices, rose 0.3% for the month, slightly hotter than anticipated. The surprise increase led investors to almost completely discount the possibility of a 50 basis point rate cut at the Fed's next policy meeting. Markets are now pricing in an 83% chance central bankers will trim rates by 25 basis points, up from 66% odds priced a day ago, according to the CME FedWatch tool.
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