WASHINGTON (dpa-AFX) - Stocks moved mostly lower during trading on Tuesday giving back ground following the substantial rally seen to start the week. The major averages all moved to the downside, although selling pressure appeared relatively subdued.
The major averages ended the day well off their worst levels but still in negative territory. The Nasdaq slid 187.26 points or 0.7 percent to 25,065.87, the S&P 500 fell 29.01 points or 0.4 percent to 7,520.93 and the Dow dipped 157.86 points or 0.3 percent to 52,231.89.
The pullback on Wall Street came following the release of a closely watched Labor Department report showing consumer prices increased by more than expected in the month of October.
The Labor Department said its consumer price index rose by 0.4 percent in October after climbing by 0.6 percent in September. Economists had expected consumer prices to rise by 0.3 percent.
The report said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent in October, matching the increases seen in the two previous months. Core prices were expected to edge up by 0.2 percent.
The Labor Department noted it is not able to provide data on the annual rate of consumer price growth due to the government shutdown in October 2025.
The hotter-than-expected inflation data led to renewed concerns about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting next month.
CME Group's FedWatch Tool is currently indicating a 90.5 percent chance the Fed will raise rates by a quarter point at its December meeting.
Before the release of the data this morning, Fed Governor Christopher Waller said he is 'leaning toward' a rate hike in December and would support 'more robust action' if inflation exceeds estimates.
'In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,' Waller said at a conference in London. 'Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.'
Sector News
Gold stocks pulled back sharply along with the price of the precious metal, with the NYSE Arca Gold Bugs Index plunging by 5.6 percent after ending the previous session at its best closing level in well over a month.
Substantial weakness was also visible among interest rate-sensitive housing stocks, as reflected by the 2.6 percent slump by the Philadelphia Housing Sector Index.
Software stocks also showed a significant move back to the downside, dragging the Dow Jones U.S. Software Index down by 1.7 percent.
Computer hardware stocks also saw notable weakness on the day, while natural gas stocks turned in a strong performance amid a jump in the price of the commodity.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index shot up by 2.9 percent, while South Korea's Kospi soared by 4.4 percent.
Meanwhile, the major European markets turned mixed over the course of the session. While the French CAC 40 Index fell by 0.3 percent, the German DAX Index rose by 0.3 percent and the French CAC 40 Index climbed by 0.6 percent.
In the bond market, treasuries moved sharply lower in reaction to the hotter-than-expected inflation data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 11.9 basis points to 4.983 percent.
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