Consumer Price Index showed an acceleration to 2.9%, the highest rate since July. With such high inflation, the Fed is unlikely to cut rates in January.

The stock market's stiffest headwind, a surge in Treasury bond yields, was blown aside Wednesday by a surprisingly benign inflation report, which could rekindle bets on multiple Federal Reserve rate cuts before year-end.

Inflation is proving stickier than expected, which could cause Fed to hit pause button on more interest rate cuts.