S&P 500 (SPY) Dives Towards 3500 As Inflation Rate Exceeds Expectations

S&P 500 Falls by 2% Prior Market Trading

Following the publication of inflation statistics, S&P 500 futures are touching new lows. In contrast to the expert consensus of 8.1%, the figures showed that the inflation rate decreased from 8.3% in August to 8.2% in September.

Analysts predicted that the core inflation rate would go to 6.5%, but it actually jumped from 6.3% in August to 6.6% in September.

In the meanwhile, according to the Initial Jobless Claims report, 228,000 Americans applied for unemployment benefits in a single week, much in line with expert expectations.

Treasury rates reached annual highs as traders gambled on aggressive rate rises from the Fed in response to inflation readings that were stronger than anticipated. The 10-year Treasury yield is now attempting to stabilize above the psychologically significant 4.00% level. In the event that this effort succeeds, it will pick up further upward momentum and rise towards 4.10%, which is negative for equities.

At the start of today's trading session, tech stocks are probably going to lose ground. Leading tech companies' shares are already down more than 2% in premarket trade, including Apple, Microsoft, Alphabet, Amazon, and Tesla.

Whether traders would go for safe-haven assets in the stock market today remains to be seen. Money will move into the U.S. dollar, which is already reaching new highs, in case the fear spreads. Commodities are negatively impacted by a strong dollar, thus equities with a focus on commodities are probably going to see significant pressure today.