The S&P 500 fell 0.25% to 7,651.54 after gaining as much as 0.7% earlier in the session. The Dow Jones Industrial Average dropped 443.87 points, or 0.86%, to 50,906.05, while the Nasdaq Composite gained 0.24% to 26,861.06.
The Federal Reserve’s preferred inflation measure showed price pressures easing in August. Headline PCE inflation slowed to 3.4% annually from 3.7%, while core inflation eased to 3% from 3.3%, both below expectations.
The data reduced expectations for another Fed increase this month, with markets pricing around a 35% chance of a 25-basis-point hike, down from about 51% a day earlier.
However, stronger economic data kept pressure on bond yields. Private payrolls rose by 90,000 in September, beating expectations, while the US 10-year Treasury yield climbed to around 5.30%.
For September, the S&P 500 fell 0.5% and the Dow dropped 4.3%, while the Nasdaq gained 1.9%.
Australian Market Outlook
Australian shares are set to open lower, with S&P/ASX 200 futures down 48 points, or 0.5%, to 8,765. The weaker lead follows late selling on Wall Street, although softer US inflation has reduced expectations for an immediate Fed rate rise. Attention now turns to Friday’s US jobs report, with non-farm payrolls expected to rise by 84,000 in September. Investors will be watching the figures for further clues on the outlook for US interest rates and global bond yields.
