Close: Tech, Small Caps Slide as Inflation Revives Rate-Hike Concerns

U.S. stocks closed lower Wednesday, Oct. 14, with the Nasdaq 100-tracking QQQ falling 1.97% to $728.95 and the S&P 500-tracking SPY losing 1.08% to $769.60. The Dow-tracking DIA slipped 0.11% to $515.63, while the Russell 2000-tracking IWM dropped 1.93% to $271.37.

Nvidia fell 3.16% to $221.30 and Microsoft lost 1.80% to $533.69 as CNBC reported a sell-off in AI infrastructure stocks. Apple bucked the weakness, gaining 0.50% to $342.96. JPMorgan Chase rose 1.16% to $335.28, and Exxon Mobil advanced 1.68% to $177.01.

Losses extended across smaller companies, with mid-cap IonQ tumbling 9.53% to $31.42. Among small caps, Intuitive Machines fell 9.52% to $11.02, Aehr Test Systems dropped 7.77% to $71.49 and Plug Power shed 7.05% to $1.45. Micro-cap Duos Technologies sank 12.64% to $5.60, while ClearSign Technologies declined 8.51% to $2.63.

Inflation and geopolitical risks framed the session. Reuters reported that U.S. inflation heated up in September, putting a Federal Reserve rate increase this month back on the table. Reuters also reported that two ships sank near Hormuz after projectile strikes and that Yemen's Houthis vowed further attacks on Saudi airports and oil facilities after an attack on Aramco headquarters.

Attention now turns to the Fed's rate decision this month and whether renewed inflation pressure translates into tighter policy. Developments near Hormuz and in Saudi Arabia remain in focus, alongside whether the weakness in AI infrastructure shares and smaller stocks persists.