Indexes dipped Thursday as investors took in hotter-than-expected inflation data.
Jobless claims, meanwhile, climbed 33,000 to 258,000, its highest in over a year.
Traders see the latest data solidifying odds of a 25 basis point rate cut next month.
US stocks edged lower on Thursday as investors took in slightly hotter-than-expected inflation data after last week's blockbuster jobs report.
The consumer price index showed prices increased 2.4% year-over-year in September, which came in just above consensus forecasts of a 2.3% rise.
The core CPI reading, which excludes food and energy costs, came in at 3.3% year-over-year, slightly above forecasts of 3.2% and 0.3% higher than the August reading.
Analysts are now shifting their expectations for further easing from the Federal Reserve as inflation cools slightly slower than expected, and as last week's blockbuster jobs report showed a hot economy with 254,000 jobs added last month.
The jobs report dashed hopes of another jumbo 50-basis point cut, but the slight upside surprise in CPI likely isn't enough to prompt a complete pause on Fed easing.
"There is only one more set of inflation reports between now and then, and even a firm upside surprise could be discounted as normal monthly volatility on the path back toward the 2% target," JPMorgan analysts said in a Friday note after the jobs report.
Investors now see a 25-basis point rate cut at the central bank's meeting next month more likely compared to leaving rates unchanged, according to the CME FedWatch Tool.
Weekly jobless claims, meanwhile, climbed 33,000 to 258,000, according to Labor Department data released Thursday.
That surpassed forecasts of 230,000 and marks the data point's highest level in over a year.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:
S&P 500: 5,774.06, down 0.32%
Dow Jones Industrial Average: 42,429.01, down 0.2% (-82.99 points)
Nasdaq composite: 18,218.14, down 0.41%
Here's what else was going on Thursday:
FEMA was strapped for cash even before Hurricanes Helene and Milton blew through the South.
JPMorgan's top strategist, one of Wall Street's biggest bears, is turning upbeat on the stock market for the first time in two years.
Billionaire investor Bill Gross recommends defensive and high-yield stocks as the market's record-breaking run is set to slow.
In commodities, bonds, and crypto:
Oil futures rose. West Texas Intermediate crude rose 1.3% to $74.23 a barrel. Brent crude, the international benchmark, climbed 1.34% to $77.62 a barrel.
Gold rose 0.36% to $2,635.6 an ounce.
The 10-year Treasury yield was about flat at 4.08%.
Bitcoin inched lower to $63,126.50.
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