Dow closes more than 150 points lower as inflation data reignites interest rate fears: Live updates

Here's how the major indexes ended Thursday's trading session:

• The Dow Jones Industrial Average lost 173.73 points, or 0.51%, to close at 33,631.14.
• The S&P 500 declined by 0.62% at 4,349.61.
• The Nasdaq Composite was lower by 0.63% at 13,574.22.

— Pia Singh

The U.K.-traded shares of natural gas company Energean are down 18% week to date, marking the largest declines out of the oil companies who engage in offshore drilling at Israeli gas fields.

"Interestingly, Tamar field-exposed companies are down the least," according to Jefferies analyst Mark Wilson. Tamar Petroleum and Isramco, which have working interest in the Tamar gas field, are down 7.3% and 5.4% week to date, respectively. Both companies are traded on the Tel Aviv Stock Exchange. The Tamar gas field is so far the first field to have been shut down by Israel's energy ministry. Production facilities in the field are the closest to the Gaza Strip.

By comparison, Ratio Energies and NewMed Energy, which have about 50% working interest in the Leviathan gas field, are down more than 12% for the week.

— Hakyung Kim

Thursday's consumer price report for September was "modestly hotter-than-expected" and insufficient to stop the Federal Reserve from raising rates one more time before the end of 2023, according to Wolfe Research chief investment strategist Chris Senyek.

"Our sense is that the FOMC will need to see core inflation break below 4% and believe it will continue to trend downward to pause and remain on hold for a prolonged period," Senyek wrote to clients.

Over the medium, Senyek believes the lagged effect of the Fed's rate hikes since March 2022 will eventually "spark economic disappointments, rising recession concerns and a downward EPS revision cycle in the months ahead," and that declining interest rates will be insufficient to offset the downward bias.

— Scott Schnipper, Michael Bloom

Homebuilder stocks fell sharply on Friday as Treasury yields moved higher, which will likely making it even harder for Americans to afford new houses.

The SPDR S&P Homebuilders ETF (XHB) was down 4.5% in afternoon trading. Shares of Lennar slid 5.7%, while D.R. Horton sank more than 6%.

A report from Freddie Mac on Thursday showed that the average for a 30-year fixed rate mortgage rose to 7.57%, the fifth straight week that the rate has increased.

— Jesse Pound

Truist upgraded shares of Exxon Mobil to a buy from hold amid a plan buy the oil company to buy Pioneer Natural Resources.

"While we forecast moderate near-term incremental earnings/cash flow from Exxon acquiring Pioneer (PXD, Hold), we anticipate more pronounced longer-term benefits in '25+ given the notably more productive proforma US inventory," said analyst Neal Dingmann.

Read more on the upgrade from Truist here.

— Samantha Subin

The luxury sector saw shares continue to pull back Thursday, on the back of LVMH Moet Hennessy Louis Vuitton's disappointing quarterly sales. Shares of LVMH fell to their largest intraday selloff in nearly two years on Wednesday, also bringing down luxury peers Richemont, Kering SA and Hermes International.

U.S.-traded shares of LVMH shed 1.8% Wednesday, bringing it lower 8.4% week to date. Hermes and Kering's U.S.-traded shares lost around 2% for the day, followed by Hermes down 1.6%.

LVMH reported a slowdown in revenue after experiencing a boom in demand from the pandemic era. Jean-Jacques Guiony, the company's chief financial officer, told investors that growth is now "converging toward numbers that are more in line with the historical average."

— Hakyung Kim

The major averages fell to session lows in afternoon trading as Treasury yields marched higher. The Dow is now down more than 200 points, while the S&P 500 and Nasdaq have lost 0.8% and 0.7%, respectively.

— Fred Imbert

All of the sectors in the S&P 500 are headed toward a winning week, with the exception of consumer staples.

Utilities stocks are up 3% for the week, leading the broad market index's sector gains. NextEra Energy, Public Service Enterprise Group and AES have all rallied more than 6% week to date.

To be sure, utilities remain down 16.5% for the year.

The consumer staples sector is 0.2% lower week to date. Although shares of Walgreens have jumped more than 10% since Monday, the sector has been pulled lower by Hormel Foods and Lamb Weston, which are down 10.8% and 8.3%, respectively.

— Hakyung Kim

BTIG upgraded Warby Parker to a buy from neutral rating, saying that proprietary survey work shows an "untapped opportunity" for the company. The eyewear maker declined 0.6% on Thursday, losing early gains.

"We view Warby Parker as an industry disruptor with a long runway ahead, given the size of the US eyewear market, and the opportunity to capture share both from industry leaders and the more fragmented market of independents," wrote analyst Janine Stichter in a Thursday note.

She also views estimates as "conservative" given expectations for accelerating growth in the eyewear industry and the proper playbook in place to take advantage of this market.

BTIG set a $17 price target on shares. The stock's added about 4.8% year to date.

— Samantha Subin

Investors should be bracing for a higher-for-longer market where rates hover in the 4% to 5% range for an extended period due to "persistent" and "spotty" inflation, according to Chris Ailman, chief investment officer at the the California State Teachers' Retirement System.

"It's going to be tough for the market to move ahead and mostly because of higher interest rates," he told CNBC's "Squawk on the Street" on Thursday, due in part to heightened uncertainty fueled by geopolitical risks and climate concerns.

Amid this backdrop, Ailman's maintained exposure to the U.S. market and mega cap technology, while also upping allocation to fixed income and private credit.

"This may be the soft landing, it doesn't feel very good, but this may be what it is, that we just muddle along for an entire year and the market stays fairly range bound," he said. "You'll have seven stocks that do really well but not all the stocks are going to do well."

— Samantha Subin

Check out the companies making headlines in midday trading.

• Walgreens Boots Alliance — Walgreens Boots Alliance popped nearly 6% in midday trading after sharing that it's made progress in its cost-cutting program. The retail pharmacy giant on Thursday missed fiscal fourth-quarter earnings estimates, reporting an adjusted 67 cents per share, while analysts polled by LSEG forecasted 69 cents per share.
• Spotify Technology — The streaming stock gained 2% after Morgan Stanley named Spotify a new top pick, saying it's positioned for the long term and can claim greater market share amid rising engagement levels.
• MongoDB — The stock added 2% after Bank of America initiated coverage of the software company at a buy rating, citing its solid footing to capture market share from competitors such as Amazon and Microsoft.

Read the full list here.

— Sarah Min

Medical device stocks like Dexcom and Insulet are hitting fresh lows as investors bet the success of Ozempic and other GLP-1 medications will make consumers healthier and less in need of kidney dialysis, bariatric surgery, insulin pumps, and more.

Predictions abound: Do airlines win as they fly lighter passengers? Do food companies lose as people eat less? CNBC Pro looked at which stocks might be disrupted next.

—Christina Cheddar Berk, Samantha Subin

Target shares jumped 1.4% after Bank of America upgraded the retailer to a buy from neutral.

"With the stock trading at just 12x 2yr forward earnings, we believe the risk/reward outlook has improved and see catalysts that could drive upside to our modestly above-consensus EPS estimates as well as P/E multiple expansion," said analyst Robert Ohmes.

Read more on the Wall Street firm's upgrade here.

— Samantha Subin

Oil prices bounced back on Thursday, with futures for U.S. benchmark West Texas Intermediate crude rising 1.6% to trade just below the $85 per barrel mark. The move erased some of Wednesday's declines, the price of oil still remains below Monday's high and levels from late September, when WTI traded above $90 per barrel.

Helima Croft, RBC Capital Markets commodities strategist, said on "Squawk on the Street" that a report showing a surprising gasoline build in the United States last week is helping to keep prices in check despite the fears that the Israel-Hamas war could expand and disrupt the global oil supply.

"The question is what's going to win out this year. This broader concern about the macro backdrop — potential demand softness — or questions about the security of supply," Croft said.

— Jesse Pound

Morgan Stanley named Spotify Technology a top pick, saying that shares should get a lift from the industry's superstar year. Shares gained 2.4% on Thursday.

Shares of the company have nearly doubled this year, and could rally another 21% when taking into account higher engagement and ongoing innovation, wrote analyst Benjamin Swinburne.

Read more on the call from Morgan Stanley here.

— Samantha Subin

The chance that the Federal Reserve will raise its benchmark overnight lending rate another quarter point — to 5.50%-5.75% — by the end of this year climbed to 35.7% from 26.3% yesterday, according to the CME FedWatch tool. The move follows the release of September's consumer price index, which matched economists' estimates when stripping out food and energy costs.

The revised view, at least as derived from interest rate traders, came in the Fed's Dec. 13 policy meeting. Odds of an increase at the next Fed Open Market Committee meeting on Nov. 1 rose to just 12.6% Thursday from 9.1% Wednesday,

The probability is extrapolated from 30-day fed funds futures pricing data on the Chicago Mercantile Exchange.

— Scott Schnipper

Major stock indexes opened slightly higher on Thursday, after the latest consumer price index came out higher than expected.

• The S&P 500 was recently up about 0.1%, or 4.25 points.
• The Dow Jones Industrial Complex gained 0.1%, or 40.94 points.
• The tech-heavy Nasdaq inched higher by less than 0.1%, or 6.7 points.

— Pia Singh

First Solar shares jumped more than 3% before the bell after Barclays upgraded the solar stock to an overweight rating.

"In an environment where there is uncertainty around the trajectory of utility-scale growth, we think FSLR's contracted backlog, domestic content advantages and current valuation offers an attractive entry point," wrote analyst Christine Cho.

Read more on the upgrade from the Wall Street firm here.

— Samantha Subin

The consumer price index rose, a widely followed measure of inflation, rose 0.4% in September. That was higher than the Dow Jones consensus estimate for a 0.3% increase. It also rose 3.7% year over year, exceeding a 3.6% forecast.

So-called core CPI, which strips out volatile food and energy prices, was in line with expectations. It rose 0.3% month over month and 4.1% on a 12-month basis.

— Fred Imbert

Check out some of the companies making headlines in premarket trading:

• Ford — Shares of the automaker slipped 2.3% after the United Auto Workers union expanded its strike to target Ford's SUV and pickup truck facility in Kentucky, which is the company's largest facility measured by both revenue and workforce.
• Target — The retailer rose 2.8% after Bank of America upgraded Target to buy from neutral. The bank said Target's stock looks attractive after a recent slide and that the company's margins could improve in the year ahead.
• Walgreens Boots Alliance — Shares of the retail pharmacy giant fell nearly 3% after the company missed earnings estimates for the fiscal fourth quarter, as demand for Covid vaccines and tests plummets in the U.S. Walgreens also offered soft profit guidance for the full year.

Read the full list here.

— Brian Evans

Shares of Walgreens Boots Alliance dropped more than 3% after the company reported quarterly results that beat revenue expectations, but missed earnings estimates as demand for Covid vaccines and tests lowered in the U.S. Here's what Walgreens reported premarket:

• Earnings per share: 67 cents adjusted vs. 69 cents expected
• Revenue: $35.42 billion vs. $34.78 billion expected

This marks the second straight quarter that the retail pharmacy giant has underperformed Wall Street's adjusted earnings expectations. Read more on the earnings here.

— Pia Singh, Annika Kim Constantino

Delta Air Lines traded more than 2% higher in the premarket after the airline delivered third-quarter earnings that beat analyst expectations.

The company earned an adjusted $2.03 per share, exceeding an LSEG estimate of $1.95 per share. Delta's bottom line was also 60% higher from the year-earlier period thanks to strong travel demand.

— Fred Imbert, Leslie Josephs

Ford Motor shares were down 2% in the premarket after United Auto Workers unexpectedly expanded its U.S. strikes to a Ford plant in Kentucky, where SUVs and trucks are built.

"The strike was called after Ford refused to make further movement in bargaining," the union said in a release. "The surprise move marks a new phase in the UAW's Stand Up Strike."

Ford said the "decision by the UAW to call a strike at Ford's Kentucky Truck Plant is grossly irresponsible but unsurprising."

— Michael Wayland, Fred Imbert

Shares of Domino's Pizza fell more than 2% in the premarket after the pizza delivery chain released its third-quarter results. The company earned $4.18 per share versus $2.78 per share in the year-earlier period. To be sure, the company's U.S. comparable sales fell 0.6%. Analysts polled by StreetAccount expected sales to remain flat.

— Fred Imbert

The S&P 500 is down nearly 2% over the past month despite riding a four-day winning streak. However, Societe Generale thinks this is a buying opportunity.

"Buy the dip in the S&P 500," wrote Stephen Gallagher, the bank's U.S. head of research. "Micro drivers are strong and should speed up the profit cycle over the next six months before the start of a consumer downturn. Overweight S&P 500 vs Russell 2000, Long Nasdaq Equal Weighted on US-10yr yield consolidation."

— Fred Imbert, Michael Bloom

European stock markets opened higher Thursday, with the Stoxx 600 index up 0.6% at 8:10 a.m. London time.

Germany's DAX gained 0.5%, while the U.K.'s FTSE 100 and France's CAC 40 were both around 0.6% higher.

— Jenni Reid

Hong Kong's Hang Seng Index rose more than 2% in afternoon trade, leading wider gains in the region, boosted by financial stocks.

Index heavyweights are in the green. Hong Kong-listed China Construction Bank is up 5.86%, and Ping An is 2.5% higher. HSBC Holdings rose 1.04%.

Other financial stocks adding to the index's gains include China Life Insurance and China Merchants Bank which climbed 4.13% and 5.31% respectively. Industrial and Commercial Bank of China popped 5.05%.

—Lee Ying Shan

Exxon Mobil's acquisition of shale rival Pioneer Natural Resources is the largest oil and gas merger in a decade, and "one for the record books," says Raymond James' managing director and equity research analyst Pavel Molchanov.

On Wednesday, Exxon Mobil said it agreed to buy Pioneer Natural Resources for $59.5 billion in an all-stock deal, or $253 per share. The deal marks Exxon's biggest since it bought Mobil, and is expected to close in the first half of 2024.

While it's a "good deal" for Exxon from a historical valuation perspective, Molchanov noted that it's important to also recognize that Exxon's own stock has been trading at a much lower valuation than it used to.

Exxon estimated its production volume in the Permian Basin would more than double to 1.3 million barrels of oil equivalent per day.

"It's no coincidence that the Permian is the focus of his deal," said Molchanov, elaborating how it is the "most prolific and economically attractive basins."

Pioneer shares were up 1.44% at the close, while Exxon's slipped 3.58%.

—Lee Ying Shan, Fred Imbert

India is slated to release its inflation numbers for September later Thursday, with Reuters' analysts forecasting a 5.5% year-on-year climb.

The projected reading would compare to a 6.83% rise in August, driven largely by food prices.

"An easing in food and fuel inflation likely drove a softening in the headline rate," a Barclays report dated early October forecasts.

That being said, the slower inflation print may still be insufficient for India's central bank to start trimming rates.

"Even with a large step down to below 5.5%, inflation merely settles back into the upper half of the RBI's 4+/-2% inflation target," Mizuho's head of economics and strategy Vishnu Varathan wrote in a daily note. He expects that the print would only provide the country's central bank with the "comfort to hold, not cut" rates, as well as retain a "mild hawkish bias."

The Reserve Bank of India last week kept its interest rates steady at 6.5%.

—Lee Ying Shan

A bumper crop of companies made their initial public offerings this year, but many of them have since fallen short of their IPO price.

Year to date, 88 companies have debuted on the public markets, up 37.5% from this point a year ago. However, 76% of these stocks are trading below their IPO price. That includes sandals manufacturer Birkenstock, which had an IPO price of $46 a share, but ended up closing Wednesday's trading at $40.20, a 12.6% decline.

Kenvue and Instacart are also among the stocks trading below their offering price. Kenvue has tumbled 11% since it started trading, while Instacart is off nearly 17% since its debut.

-Darla Mercado, Gina Francolla

Defense stocks have jumped this week following the outbreak of the Israel-Hamas war, with the iShares U.S. Aerospace and Defense ETF rising 5.8% week to date. Nonetheless, Capital Wealth Planning chief investment officer Kevin Simpson has sold off some of his Lockheed Martin shares as a result of the strength — noting that he remains bearish on the defense sector overall.

"We've been selling Lockheed since September for relative underperformance. That's how lousy this sector and the stock has been," Simpson told CNBC's "Closing Bell" on Wednesday.

Simpson added that he is selling the stock on account of its underperformance compared to its relative price movement.

Reducing his exposure to the defense company "speaks nothing to what happened over the weekend; [it] speaks more to the fact that I think there's dysfunction in Washington, and it's going to take some time for them to get maybe their act together to do what we would all hope," said Simpson.

— Hakyung Kim

Check out the companies making headlines in extended trading.

Victoria's Secret & Company — Shares rose 1.1% after the company's third-quarter guidance came in stronger than expected. The company narrowed its forecasts for adjusted net and operating losses.

Microsoft — The tech company dipped 0.5%on reports that the Internal Revenue Service is seeking an additional $28.9 billion in taxes from the company. Microsoft said it would contest the claims and will take the issue to court if necessary.

Neogen — Shares of the food safety company gained nearly 4% after chief financial officer David Naemura purchased 10,000 shares, according to an SEC filing.

— Hakyung Kim

U.S. stock futures opened slightly higher Thursday night.

Dow Jones Industrial Average futures gained 38 points, or 0.1%.

Futures tied to the S&P 500 and Nasdaq 100 also rose 0.1%.

— Hakyung Kim