US stocks close mixed as Treasury yields rise despite softer inflation

US stocks closed mixed Wednesday, the final trading day of September, as rising Treasury yields weighed on sentiment despite softer-than-expected inflation data.

The Dow Jones Industrial Average fell 443.87 points, or 0.86%, to 50,906.05, while the S&P 500 declined 19.30 points, or 0.25%, to 7,651.54.

Meanwhile, the Nasdaq composite gained 63.52 points, or 0.24%, to 26,861.06.

Investors assessed the Federal Reserve's preferred inflation measure, the personal consumption expenditures price index, which increased 3.4% year-on-year in August, below market expectations of 3.7%.

Core inflation, which excludes food and energy, stood at 3%, also below expectations. Both measures remained above the Fed's 2% inflation target.

Stronger-than-expected employment data accompanied the inflation release.

Private employers added 90,000 jobs in September, according to payroll processing firm ADP, exceeding expectations of 68,000.

"After a three-month slowdown, job creation rebounded and pay growth remained solid," ADP chief economist Nela Richardson said.

Traders reduced bets on an October interest rate increase following the inflation figures.

The probability of a quarter-point hike fell to around 35%, from 51% a day earlier, according to CME Group's FedWatch tool.

Attention now turns to Friday's September employment report, with nonfarm payrolls expected to increase by 84,000.

Meanwhile, the yield on the benchmark 10-year US Treasury rose about 4.3 basis points to a 24-year high of 5.306%.

European stocks close lower

European stock markets finished Wednesday lower as investors monitored developments in the Middle East, their implications for energy prices and inflation, and elevated bond yields.

The benchmark Stoxx Europe 600 index fell 0.5% to 634.89.

Britain's FTSE 100 declined 0.29% to 10,606, while Germany's DAX 40 dropped 0.79% to 25,199.19.

France's CAC 40 lost 0.89% to 7,964.51, and Italy's FTSE MIB retreated 0.84% to 51,371.98.