The S&P 500 and the Nasdaq Composite posted their sharpest one-day declines since July

The S&P 500 broad-market index fell 1.1%, while the Nasdaq Composite dropped 1.88% at the close of trading on October 14. For both indices, this marked their worst single-session performance since July, according to Barron's. The Dow Jones Industrial Average, a blue-chip index, fell less sharply—by 48.6 points, or less than 0.1%.

At the same time, the indices closed slightly above their intraday lows: for example, the Nasdaq Composite was down 2.2% at one point, while the Dow Jones was down 0.6%.

The main pressure once again fell on the technology sector, particularly on stocks of chip and processor manufacturers: the iShares Semiconductor ETF fell for the seventh consecutive session, Barron's noted.

“I think algorithms are calling the shots these days, and they’re mercilessly selling off everything related to technology,” said Jeff Kilberg, founder and CEO of KKM Financial. “Ultimately, I think this is beneficial, but all these movements seem exaggerated, since we’re still very close to all-time highs.”

One of the reasons for the negative investor reaction was the release of the September Consumer Price Index (CPI), which came in higher than expected. Against this backdrop, government bond yields rose. And while stocks continued to fall during the session, yields retreated somewhat from their highs.

The Fed’s “Beige Book” —a report on economic conditions in each of the 12 U.S. Federal Reserve districts—added to the pressure. The document “smacks of stagflation,” said Robert Embry of Rosenberg Research, as reported by Barron’s.

“The Beige Book sends a clearly uncomfortable signal to the Federal Reserve,” he wrote. — It certainly fuels doubts about the narrative of a “resilient” economy. And while inflation is a cause for concern, wage growth appears to have changed little since September, and overall sentiment in the labor market has weakened. There is nothing in this report that would give the ‘hawks’ a compelling argument without additional data.”

The released statistics underscore the importance of the Producer Price Index (PPI) for September, which will be released on Thursday, October 15, according to Barron's.

This article was AI-translated and verified by a human editor