Update: US Equity Indexes Drop as Big-Tech Sinks After Hot Inflation Report Lifts Odds of Fed-Rate Increases

03:48 PM EDT, 10/14/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.) US equity indexes fell after a hotter-than-expected core inflation report raised the odds of interest-rate increases and sent mega-cap technology names sharply lower. The Nasdaq Composite dropped 1.8% to 26,714.8, the S&P 500 slid 1.2% to 7,712.5, and the Dow Jones Industrial Average declined 0.4% to 51,472.5 ahead of Wednesday's close, as the Bureau of Labor Statistics data showed inflationary pressures were creeping up outside the more volatile food and energy prices. The consumer price index jumped 0.6% in September, as expected in a Bloomberg-compiled poll, and from 0.4% in August, according to the BLS. Core CPI climbed 0.3%, above the 0.2% consensus but in line with August's print. Headline and core CPI year-over-year accelerated to 3.7% and 2.6%, respectively, from 3.4% and 2.4%, and beat market expectations. A 9.1% month-over-month surge in gasoline dominated the headline rate, as expected, Jefferies said in a note, while adding that several upside surprises in core inflation imply higher energy prices are passing through to non-energy goods. The CME FedWatch tool showed the probability of the Federal Reserve raising its target rate by 25 basis points in October rose to 35% on Wednesday from 22% on the prior day. The market now sees a 29% likelihood of another 25-basis-point increase in December, versus 19% a day ago. It assigns a 33% probability of a move of the same magnitude in March, up from 30% a day earlier, implying three rate increases are possible by the end of Q1 if the Iran war continues after the US midterm elections. US Treasury yields were mixed, with the two-year rising 1.3 basis points to 4.81%, after clocking 4.95% intraday. The 10-year yield fell 2.7 basis points to 5.19%, after trading as high as 5.33% earlier in the session. Technology, communication services, and consumer discretionary led the decliners. The PHLX Semiconductor index slumped 4.3%, its sixth consecutive day of declines adding up to more than 10% cumulative. Nine of the bottom 10 were technology names among stocks with market capitalization exceeding $200 billion, according to data compiled by Finviz. The front-month US West Texas Intermediate crude oil contract advanced 1% to $95.10 per barrel, and global benchmark Brent edged up 0.4% to $106.10 per barrel.