U.S. stock market closes slightly lower

The Dow Jones Industrial Average dropped 113.52 points, or 0.21%, to 53,463.88, the S&P 500 shed 1.58 points, or 0.02%, ​to 7,675.70 and the Nasdaq Composite slipped 21.10 points, or 0.08%, to 26,130.20

U.S. stock indexes closed slightly lower on Wednesday after an inflation reading ​came in hotter than expected.

The Dow Jones Industrial Average dropped 113.52 points, or 0.21%, to 53,463.88, the S&P 500 shed 1.58 points, or 0.02%, ​to 7,675.70 and the Nasdaq Composite slipped 21.10 points, or 0.08%, to 26,130.20.

A Commerce Department report showed annual U.S. inflation rose 3.7% in the 12 months through July, a touch above expectations. Separate data showed the economy grew 1.5% in the second quarter.

The latest print added another wrinkle to the U.S. central bank’s policy outlook, raising the stakes for upcoming economic data. Investors will focus sharply on central bank Chair Kevin Warsh’s Jackson Hole speech on Friday.

It wasn’t enough ​to shift the balance for September’s meeting, but if subsequent data point in the same direction, the Fed may feel more pressure to move ​off the sidelines, said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

The central bank’s next scheduled meeting is in ⁠September, putting the policy decision in focus during what is historically a weak month for equities. Odds of an interest rate hike at that meeting stand ​at 38.1%, according to the CME FedWatch tool.

There is no crisis, it is more about expectations or guidance we are going to get from the Fed ​and what the Treasury is trying to do. That blends to some uncertainty and basically increases the risk premium, said Greg Tuorto, head of U.S. small and midcap investing at Goldman Sachs Asset Management.

But on the other side, on the positive side, the underlying economic environment is really good. Earnings for the companies that we own and some of the larger ​cap companies are standout, he said.