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Dow, stocks tumble despite signs of easing inflation

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The Dow fell nearly 300 points in uneven trading on Wall Street early Thursday and bond yields pulled back after the federal government reported that a measure of inflation that’s closely watched by the Federal Reserve eased in October.

The Dow Jones Industrial Average was down 299 points, or 0.8%, to 34,297 and the Nasdaq rose 0.2% at 11 am EST.

The S&P 500 was flat. The benchmark index was roughly split between gainers and losers, but some big tech stocks weighed down the broader market.

Major indexes are coming off of their second straight month of gains.

Yields on each short-term and long-term bonds fell. The yield on the 10-year Treasury, which influences mortgage rates, edged lower to three.60% from 3.61% late Wednesday.

Investors are reviewing the newest update on inflation. A measure of inflation that’s closely monitored by the Fed eased in October. Wall Street has been closely watching any updates about inflation to get a greater sense of whether the Fed will tone down its aggressive rate of interest increases.

The central bank has been deliberately slowing the economy as a way to tame stubbornly hot inflation. Prices have been falling, but still remain historically high.

Fed Chair Jerome Powell said Wednesday that the central bank could begin moderating its pace of rate hikes as soon as December, when its policymaking committee will hold its next meeting. The Fed, though, has been very clear about its intent to proceed raising rates of interest until it is bound that inflation is cooling.

The Fed has raised its benchmark rate six times since March, driving it to a spread of three.75% to 4%, the best in 15 years. Wall Street expects as much and expects the benchmark rate to succeed in a peak range of 5% to five.25% by the center of 2023.

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