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September CPI data higher than expected

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Delta Air Lines ( DAL ) down after Q3 results

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Indexes down: Dow 0.18%, S&P 500 0.27%, Nasdaq 0.38%

(Updated at 9:35 a.m. ET/1335 GMT)

By Lisa Pauline Mattackal and Pranav Kashyap

Oct 10 (Reuters) -

Wall Street opened lower on Thursday as hotter-than-expected

September inflation data reinforced expectations of a

25-basis-point rate hike by the Federal Reserve at its upcoming

meeting.

The closely watched

Consumer Price Index

rose 0.2% on a monthly basis and 2.4% on an annual basis,

with both figures being slightly higher than estimated by

economists Reuters polled.

The core figure, which excludes volatile food and energy

prices, rose 3.3% year-over-year, versus an estimated 2.3%.

The Dow Jones Industrial Average fell 75.96

points, or 0.18%, to 42,433.87, the S&P 500 lost 15.88

points, or 0.27%, to 5,776.16 and the Nasdaq Composite

lost 69.40 points, or 0.38%, to 18,222.22.

The Russell 2000, which tracks economically

sensitive small-cap stocks, lost 1.09%.

Rate-sensitive sectors fell, with Real Estate

losing 0.6%, while Information Technology dropped

0.5%.

After the inflation data was released, traders firmed

bets on a 25-bps cut in November at 86.9%, with a 13.1% chance

of no change at all, according to CME's FedWatch.

"The market's reacting because you're pricing out the

possibility of big Fed rate cuts and the risk that the Fed isn't

going to be as supportive to markets," said Cameron Dawson,

chief investment officer at NewEdge Wealth.

However, weekly jobless claims also rose to 258,000 for

the week ending Oct. 5, versus an estimate of 230,000.

"The CPI data coming in hotter than expected, and at the

same time (that) initial jobless claims really picked up, is

certainly a confusing message for markets," Dawson said.

"Whether or not that means the Fed is going to be able

to deliver the full extent of its expected interest-rate cuts is

a good question."

Meanwhile, Delta Air Lines ( DAL ) lost 2.1% after

forecasting quarterly revenue below expectations in anticipation

of slower travel spending.

Other airlines also lost ground, with United Airlines

down 1.4%, American Airlines ( AAL ) losing 2% and

Southwest Airlines ( LUV ) slipping 1%.

Equity market performance has been largely led by

expectations for easing monetary policy, with traders now

scrutinizing how much further the central bank will lower

borrowing costs this year.

Among other single movers, shares of Pfizer ( PFE ) fell

2.4% as former executives distanced themselves from activist

investor Starboard's campaign against the drugmaker.

Both the S&P 500 and the Dow notched up record

closing highs on Wednesday, after minutes from the Federal

Reserve's last meeting showed a "substantial majority" of

policymakers had been in favor of September's 50-bps rate cut.

The start of the third-quarter earnings season is also

in focus, with major banks scheduled to report results on

Friday.

The third-quarter earnings growth rate for the S&P 500

is estimated at 5% year-over-year, according to estimates

compiled by LSEG.

Comments from Fed officials Thomas Barkin and John Williams

are expected later in the day.

Investors also monitored the impact from Hurricane Milton,

which made landfall on Florida's west coast late on Wednesday.

Declining issues outnumbered advancers by a 2.06-to-1 ratio

on the NYSE, and by a 2.65-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and one new

low, while the Nasdaq Composite recorded 13 new highs and 50 new

lows.