The Japan Times - US stocks fall after hot inflation report as leading AI shares tumble

The consumer price index was up more than analysts expected in September, rising 3.7 percent on a year-on-year basis, a marked increase from August's 3.4 percent reading.

"Today's CPI report came in hot, with annual headline inflation reaching its highest level since May," said eToro analyst Bret Kenwell.

"The knee-jerk reaction may be for traders to reassess the odds of a Fed rate hike later this month," he said.

While all three major US indices dropped, the Nasdaq suffered the deepest declines, losing nearly two percent.

The inflation report was troubling enough to suggest that the Fed's September interest rate hike was "was not one and done," said Angelo Kourkafas of Edward Jones, who described the weakness in AI names as related to the interest rate outlook.

"As we are navigating this higher-for-longer rate environment, we are seeing the realization that the cost to borrow is moving higher and we know there's a massive cost of building all the AI Infrastructure," Kourkafas said.

Data center operator CoreWeave lost more than 15 percent, while chip companies Nvidia and AMD also fell sharply.

In Europe, the day ended higher in London, Paris and Frankfurt after Asian equities struggled to claw back the previous day's steep tech losses.

Tech firms had taken a hammering on Tuesday amid concerns about China's progress in developing AI chips and following comments by Broadcom's chief executive likening the AI buying frenzy to gambling.

Tokyo and Seoul, both with big tech weightings, closed lower again on Wednesday.

Hong Kong and Shanghai also fell, with investors appearing unmoved by data showing China's exports picked up pace in September and soared 36.3 percent, far more than expected.

Investors also assessed largely upbeat earnings from Dutch chipmaking equipment giant ASML, which reported record sales and strong profits on huge demand for AI.

ASML shares rose 1.7 percent on the Amsterdam stock market.

Shares in Lufthansa descended 2.2 percent after Portugal announced the German airline group had been chosen to take a 44.9 percent stake in TAP for 1.03 billion euros as part of the reprivatization of the airline.

Bank of America finished down 4.8 percent after US agencies fined the lender $1.2 billion for violating anti-money laundering laws.

- Key figures at around 2020 GMT -

New York - Dow: DOWN 0.1 percent at 51,621.48 (close)

New York - S&P 500: DOWN 1.1 percent at 7,718.94 (close)

New York - Nasdaq Composite: DOWN 1.9 percent at 26,692.87 (close)

London - FTSE 100: UP 0.7 percent at 10,724.86 (close)

Paris - CAC 40: UP 0.6 percent at 7,873.11 (close)

Frankfurt - DAX: UP 0.2 percent at 25,298.61 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 67,744.29 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 24,314.17 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,767.23 (close)

West Texas Intermediate: UP 1.0 percent at $95.09 per barrel

Brent North Sea crude: UP 0.4 percent at $106.06 per barrel

Euro/dollar: DOWN at $1.1147 from $1.1199 on Tuesday

Pound/dollar: DOWN at $1.3189 from $1.3255

Dollar/yen: UP at 158.37 yen from 158.33 yen

Euro/pound: UP at 84.57 pence from 84.49 pence

H.Nakamura--JT