Markets retreat as inflation data fuels rate hike fears

The sell-off hit technology and AI-related stocks particularly hard, dragging the Nasdaq to 26,692.87. Small-cap stocks faced a steeper decline, with the Russell 2000 index falling more than 2%. This drop pushes the index into correction territory, sitting over 10% below its record highs reached earlier this year. The Dow Jones Industrial Average proved more resilient, shedding only 48.62 points to close at 51,621.48.

Bond market volatility followed the inflation data, though yields retreated from their session highs as equity selling accelerated. The 10-year Treasury note yield dipped 0.027 percentage points to 5.189%, marking a three-week low, while the two-year note yield edged up to 4.800%. The strengthening dollar, which climbed 0.38% on the ICE index to a yearly peak, pressured commodities, sending gold futures down 1.64% to $4,084.80 per troy ounce.

Amid the financial turbulence, geopolitical instability continues to influence energy prices. Brent crude rose 0.4% to $106.06 a barrel following reports that Houthi militants struck a facility belonging to Saudi Arabia's state-owned oil producer. This incident follows a separate attack on a Saudi airport earlier this week, keeping supply concerns at the forefront of the commodities market.