05:06 PM EST, 11/13/2025 (MT Newswires) -- US equity indexes sank on Thursday as the odds of a December interest-rate cut plunged to around half from nearly certain a month ago amid concerns that inflation could restrain the Federal Reserve, piling pressure on stretched and long-duration assets.

The Nasdaq sank 2.3% to 22,870.4, with the S&P 500 down 1.7% to 6,737.5 and the Dow Jones Industrial Average 1.7% lower at 47,457.2.

According to the Federal Reserve Bank of Cleveland's inflation nowcast, the core consumer price index, which excludes the more volatile food and energy prices, is forecast to have grown by an estimated 0.3% in October.

In September, the US Bureau of Labor Statistics reported 0.2% growth in core CPI. October's CPI data from the BLS, scheduled for release on Thursday, has been delayed, according to media reports.

San Francisco Fed President Mary Daly said Thursday it's "premature" to say whether or not the Federal Open Market Committee members should cut rates for a third consecutive time at the December policy meeting, according to a Stifel note. Noting the tension between the Fed's twin goals, Daly said inflation is "still stubborn" while the labor market has "slowed quite a bit."

This is a change in nuance from late September when Daly had said that further rate cuts are likely needed, but the Fed should approach those with caution, Bloomberg reported. Further policy adjustments will likely be required as the Fed works "to restore price stability while providing needed support to the labor market."

Meanwhile, Atlanta Fed President Raphael Bostic said Wednesday that "clearer and urgent risk is still price stability" despite shifts in the labor market, according to the Stifel note. Echoing Bostic, Boston Fed President Susan Collins said she is in favor of holding rates steady "for some time to balance the inflation and employment risks in a highly uncertain environment," as per the Stifel note.

The probability of a 25-basis-point cut in rates from the Federal Reserve in December dropped to 52% by Thursday afternoon, from 96% a month ago, according to the CME Group's FedWatch Tool. The remaining likelihood is for the Fed to leave its target rate for fed funds unchanged in the 3.75% to 4% range.

US Treasury yields rose across the curve, with the 10-year yield up four basis points to 4.12% and the two-year rate higher by 2.7 basis points to 3.59%.

All sectors except energy and consumer staples fell at the close. Technology, communication services, and consumer discretionary led the decliners.

Among the six Magnificent-7 stocks that fell intraday, the worst performer was Tesla (TSLA), down 6.6%. The high-growth, electric car manufacturer was also among the worst performers on the S&P 500 and the Nasdaq. Included in the Nasdaq laggards was Palantir Technologies ( PLTR ) , which closed 6.5% lower, as investors cut exposure to stretched AI-trade plays.

The Global X Artificial Intelligence & Technology ETF ( AIQ ) , with net assets of $5.98 billion and investments in firms related to AI, slumped 2.7%. The $386 billion Invesco QQQ Trust (QQQ), a tech-heavy exchange-traded fund offering exposure to Magnificent-7 across technology and communication services sectors, dropped 2%.