US equity indexes fell in midday trading on Thursday as rising government bond yields accompanied a slump in the odds for a December interest-rate cut, reflecting concern that the core inflation rate is increasing.

The technology-heavy Nasdaq slumped 2% to 22,946.1, leading the pack given the detrimental impact of higher-for-longer interest rates on long-duration assets. The S&P 500, whose exposure to high-growth areas is relatively smaller compared with the Nasdaq, dropped 1.2% to 6,767.3. The Dow Jones Industrial Average, home to old economy stocks, slid 0.9% to 47,807.7.

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, according to the US Bureau of Labor Statistics, the core CPI rose by 0.2%. October's CPI data from the BLS, scheduled for release on Thursday, is delayed, according to media reports.

The probability of a 25-basis-point reduction in interest rates in December dropped to 53% by Thursday afternoon, down from 63% the previous day, according to the CME Group's FedWatch Tool. The likelihood of the target rate for fed funds being left unchanged in the 3.75% to 4% range jumped to 47% from 37% on the previous day.

US Treasury yields rose across the curve, with the 10-year yield up 2.1 basis points to 4.1% and the two-year rate also higher by 2.1 basis points to 3.59%.

Energy, healthcare, and consumer staples were the only sectors to be trading up intraday, reflecting a potential rotation out of technology, communication services, and consumer discretionary, which led the decliners.

Among the five Magnificent-7 stocks that fell intraday, the worst performer was Tesla (TSLA), down 5.1%.

The Global X Artificial Intelligence & Technology ETF (AIQ), with net assets of $5.98 billion and investments in firms related to AI, slumped 1.9%. 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 1.5%.