Stocks Dip As Inflation Slows Less Than Expected, Oil Prices Spike Due To Hurricane Disruptions, Middle East Tensions: What's Driving Markets Thursday?

Major U.S. equity indices edged lower on Thursday following a hotter-than-expected Consumer Price Index (CPI) inflation report for September and as oil prices spiked, driven by fuel disruptions caused by Hurricane Milton and rising tensions in the Middle East.

The S&P 500 slipped 0.2% from its record high set on Wednesday, while the Dow Jones Industrial Average and the tech-heavy Nasdaq 100 mirrored the decline. Small-cap stocks lagged, with the Russell 2000 dropping 0.9%.

Consumer prices rose 2.4% year-over-year in September, slightly down from August’s 2.5% rate but above the consensus estimate of 2.3%. Core inflation, which strips out the volatile energy and food categories, also came in higher than expected, ticking up from 3.2% to 3.3%.

Despite the inflation uptick, economists and investors remained broadly steadfast in their expectations of a 25-basis-point interest rate cut in November.

In a separate report, weekly unemployment claims surged to 258,000 for the week ending Oct. 5, exceeding forecasts. The spike was likely influenced by auto industry layoffs in Michigan and disruptions caused by Hurricane Helene.

Oil prices rebounded sharply ...