Wednesday began with a government price report and ended with the deepest retreat in US equities since the summer. Technology shares bore the brunt: the S&P 500 lost 1.1% and the Nasdaq fell 1.9%, its biggest drop since late July, with Oracle, CoreWeave and other AI-linked names among the hardest hit, Reuters reported. Smaller companies suffered too, and the Russell 2000 slipped into a correction. The selling looked set to carry into Asia, where Bloomberg said index futures in Japan, South Korea and Australia were lower and a regional gauge faced a fourth consecutive decline.

The trigger was a consumer price index that rose more than economists expected, both overall and after stripping out food and energy. Gasoline accounted for about half of the monthly gain, though shelter, vehicle and apparel prices rose as well. Supply shocks of this kind are usually treated as temporary, but the longer the conflict with Iran runs, the more officials worry the energy spike will seep into broader prices and expectations. Treasury yields jumped and the dollar strengthened as traders priced in a greater chance that the Fed tightens again later this month, CNBC reported.

The report lands at a delicate moment for the central bank under Chair Kevin Warsh. September brought the first rate increase in more than three years, and officials have since sounded unhurried about a follow-up even as most expect one before year-end, according to CNBC. The October meeting also falls shortly before an election, timing that some traders believe lowers the chance of a move then. Wednesday's data was the final CPI reading before the Oct. 27-28 meeting, and a producer price report is due Thursday. The Fed itself leans on the personal consumption expenditures price index, and September's figure will not arrive until later this month. Not every forecaster is braced for action this month. David Kelly, who is chief global strategist at JPMorgan Asset Management, has argued against an October increase, telling Bloomberg he does not foresee one at that meeting.