US consumer prices rose 0.6% in September, lifting annual inflation to 3.7% against the 3.6% economists expected. Core CPI, which excludes food and energy, rose 0.3% on the month and 2.6% on the year, both above forecasts of 0.2% and 2.5%.
Wall Street sold off: the Nasdaq fell about 1.9% and the Russell 2000 about 1.9%, with chipmakers and AI-linked shares leading the decline. Traders raised the odds of a Federal Reserve rate hike in October to around 46%, up from roughly 22% before the data, and the 10-year Treasury yield climbed to about 5.27%.
The hotter-than-expected print revives fears that tighter policy could weigh on high-valuation tech stocks.