Wall Street was mixed in early afternoon on Thursday after a Labour Department report showed consumer prices rose more than expected in August, boosting the odds of a third interest rate hike this year. The S&P and Nasdaq came under pressure due to an Amazon-led decline in consumer discretionary shares and an Apple-led drop in technology stocks, while a jump in Boeing propped up the Dow.
The firming in inflation, along with a weekly jobless claims report that showed the labour market stays near full employment, could cause the Federal Reserve to consider raising rates in December. The Fed has its next policy meeting on September 19-20. "I don't think the market was expecting that kind of a strength in terms of inflation," said Victor Jones, director of trading at TD Ameritrade.
The strong CPI data sent US Treasury yields higher, with the two-year yield hitting a seven-week peak. The odds of a hike in December topped 50 percent for the first time since July, according to CME Group's FedWatch tool. At 12:36 pm ET, the Dow Jones Industrial Average was up 25.82 points, or 0.12 percent, at 22,184 and the S&P 500 was down 2.63 points, or 0.11 percent, at 2,495.74.
Both indexes eked out new intraday highs. The Nasdaq Composite was down 21.71 points, or 0.34 percent, at 6,438.48. The index, along with the Dow and S&P closed at record highs on Wednesday. Six of the 11 major S&P sectors were lower.