The Dow Jones Industrial Average closed the day down 240 points on Wednesday as consumer prices rose 6.2% year-over-year the largest increase since the 1990s. File Photo by John Angelillo/UPI | License Photo
Nov. 10 (UPI) -- The Dow Jones Industrial Average fell 240 points Wednesday as consumer prices reported their largest increase in 20 years.
The blue-chip index dropped 0.66% at the end of trading, while the S&P 500 fell 0.82% and the Nasdaq Composite declined 1.66% as markets responded to the Labor Department's October Consumer Price Index.
The department said consumer prices rose 6.2% year-over-year from last October, the largest increase since 1990.
"That's going to be one of the big things going forward, to see whether or not that consumer sentiment can bounce back, whether consumers will be resilient in the face of these price pressures, or whether they'll start to pull back a bit and decide they're going to hold off on spending and wait to see when prices come down or at least stabilize before they spend more in the new year," Yung-Yu Ma, BMO Wealth Management's chief investment strategist, told Yahoo Finance.
Following the CPI report, the benchmark 10-year treasury yield rose by about 10 basis points and traders moved their expectations for when the Federal Reserve would announce its first interest rate hike, anticipating greater odds that it would arrive in July.
Investors moved away from tech stocks as the treasury yield soared, with chipmakers Advanced Micro Devices and Nvidia fell 6.08% and 3.91% respectively.
Bank stocks, however, got a boost from the bond yields spike as Wells Fargo stock rose 0.94% and Bank of America climbed 0.75%.
Shares of Tesla also rose 4.34% after falling in the previous two sessions.
Disney also reported fourth-quarter earnings on Wednesday, 37 cents in earnings per share, short of analysts' expectations of 51 cents while its $18.53 billion in reported revenue also didn't meet predictions of $18.78 billion.
The company also added 2.1 million subscribers to its Disney+ streaming platform for a total of 118.1 million, in line with the company's estimates but well short of analysts who predicted they would add 9.4 million subscribers for a total of 125.4 million.
Disney stock fell 0.38% before the bell but dropped 3.38% in after-hours trading following the earnings report.