September CPI Runs Hot at 3.7%, Pushing Treasury Yields Higher and Rate-Hike Bets Up

September consumer prices rose 0.6% from the prior month and 3.7% from a year earlier, above the 3.6% economists had expected. Core CPI, which excludes food and energy, rose 0.3% on the month and 2.6% annually, both hotter than forecast. Analysts pointed to shelter, airfares and used cars as drivers, alongside energy costs tied to the conflict with Iran.

Treasury yields jumped on concern the Federal Reserve could raise rates again this month. The 10-year yield rose more than 6 basis points to about 5.28%, and the 30-year climbed to about 5.59%.

Stocks closed lower Wednesday. The S&P 500 fell about 1.1% and the Nasdaq about 1.9%, while the small-cap Russell 2000 dropped nearly 1.9%, as growth and smaller companies were hit hardest by rate-hike bets.