Stocks slid last week as hot inflation data, rising oil prices, and AI valuation worries weighed on investors. The S&P 500 lost 1.95 percent and the Nasdaq fell 4.48 percent, its worst week since June, while the Dow gained 0.67 percent as investors favored more defensive, value-oriented names. September’s Consumer Price Index rose 3.7 percent, above the 3.6 percent economists expected, and wholesale inflation hit 6.6 percent year over year, the highest level in four years. With oil at its highest level since May, all eyes turn to the Fed’s meeting in late October and a heavy week of earnings from names like Meta, Tesla, and Lockheed Martin.

U.S. stocks finished higher last week, with the S&P 500 up 1.15%, the Dow up 0.93%, and the Nasdaq up 0.64% for its fourth straight weekly gain, while developed overseas markets (MSCI EAFE) slipped 0.45%. The S&P 500 closed above 7,800 for the first time on AI chipmaker strength, but the path was bumpy, including the Nasdaq’s worst one-day drop since mid-August on Thursday. Midweek, 10-year and 30-year Treasury yields hit 24-year highs and pushed mortgage rates to a near-three-year high, though a well-received 10-year auction helped calm markets and keeps the Fed’s upcoming rate decision a close call.

Stocks were mixed in the third quarter, with the S&P 500 gaining 2.03 percent and the Nasdaq Composite rising 2.47 percent, while the Dow Jones Industrial Average fell 2.70 percent. Beneath the surface, only four of the 11 S&P 500 sectors advanced, led by Energy (+16.48 percent) on rising oil prices, while Industrials (-9.61 percent) and Utilities (-12.38 percent) bore the brunt of the selling. In September, attention shifted to the bond market as yields climbed to multi-decade highs. The Federal Reserve added to the pressure with a quarter-point rate increase to a target range of 3.75 to 4 percent, its first hike in three years.

Stocks ended last week mixed as strong economic data, cooler job growth, and the 10-year Treasury yield topping 5.29 percent pulled markets in different directions. The S&P 500 slipped 0.27 percent and the Dow fell 1.26 percent, while the Nasdaq gained 0.45 percent and touched a fresh intraday record. Q2 GDP was revised up to 2.2 percent, but September job growth slowed to just 29,000 jobs. With inflation holding at 3.4 percent, investors are watching closely to see what the Fed does at the end of the month.