Inflation: Consumer price increases in September come in slightly hotter than estimates

With CPI showing stronger-than-expected inflation growth, sectors sensitive to interest rate changes may face heightened volatility. Discretionary spending may decline as consumers become cautious, impacting retail and consumer cyclical stocks negatively. Conversely, utility and healthcare stocks could see positive sentiment as these are typically defensive and less sensitive to economic downturns.

Inflation pressures may lead to continued rate hikes from the Federal Reserve, which historically puts downward pressure on growth stocks. Tech stocks particularly resilient in the previous rally may face headwinds as investors reassess valuations in light of potential rate increases.