S&P 500, Nasdaq See Worst Day In Over Two Months As Chipmaker Rout Deepens, CPI Data Comes In Hot — AAPL, SPCX, DRAM, SOXX In Focus

• The S&P 500 ended Wednesday 1.1% lower, the Nasdaq 100 fell 2%, and the Dow Jones Industrial Average slipped 0.1%.

• Apple Inc. is gearing up to release its artificial-intelligence platform in mainland China.

• The iShares Semiconductor ETF saw its worst day in a month.

The S&P 500 and the Nasdaq 100 fell on Wednesday to record their worst day in over two months, pulled down by weakness in chip stocks amid fears of possible rate hikes after consumer inflation data came in hotter than expected.

The S&P 500 ended Wednesday 1.1% lower, the Nasdaq 100 fell 2%, and the Dow Jones Industrial Average slipped 0.1%. The Russell 2000, which tracks small-cap stocks, ended 2% lower.

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S&P 500 futures slipped 0.2%, while Nasdaq-100 futures dropped 0.7%. Dow Jones Industrial Average futures rose just 22 points.

The SPDR S&P 500 ETF (SPY) fell 1.4%, the SPDR Dow Jones Industrial Average ETF (DIA) eased 0.1%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) eased 2.8%.

Meanwhile, the VanEck Semiconductor ETF (SMH) fell 4%, and the iShares Semiconductor ETF fell 5% amid weakness in Micron Tech (MU), Nvidia (NVDA) and Broadcom (AVGO) and most other chipmakers. The broader Vanguard Information Technology ETF (VGT) dropped 3.5%.

The Roundhill Memory ETF (DRAM) fell about 5% on Wednesday, with most memory chip stocks in the red.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

September’s consumer price index climbed 0.6% from the previous month, while advancing 3.7% on an annual basis. Although monthly inflation matched forecasts, the yearly figure topped expectations, as analysts surveyed by Dow Jones had projected a 3.6% gain.

Stripping out volatile food and energy costs, core CPI rose 0.3% month-over-month and 2.6% year-over-year. These figures marginally outpaced Wall Street estimates, which called for increases of 0.2% and 2.5%, respectively.

Osaic Chief Market Strategist Philip Blancato told CNBC that the data keeps a December rate hike firmly on the table for the Federal Reserve, adding that elevated crude prices could keep core inflation near 3% next year.

Most of the inflation pressure came from elevated oil or energy prices, with prices for gasoline averaging at $4.33 a gallon, compared to about $3.08 per gallon a year earlier, according to AAA.