Around 8:30 a.m. ET, S&P 500 and Nasdaq 100 futures turned positive, erasing sharp losses from earlier in the day. Both futures still pointed to losses for the indexes at the open, however. Dow Jones Industrial Average futures were down just 31 points after the data were released, but pointed to a decline of more than 100 points.
The consumer price index rose 0.1 percent in September, well below the expected gain of 0.2 percent.
Tech shares recovered most of their losses in the premarket following the release. Facebook and Apple were both down about half a percent. Earlier in the day, they were down more than 1 percent.
Treasury yields fell from multiyear highs after the release of the data. The 10-year Treasury note yield traded at 3.167 percent while the two-year yield slipped to 2.848 percent.
Spencer Platt | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) on October 10, 2018 in New York City.
The rise in yields has stoked fears that rising borrowing costs could slow down the economy. It also adds concerns over what the future of U.S. monetary policy. The Federal Reserve has hiked rates three times this year and is largely expected to raise rates once more before year-end.
President Donald Trump criticized the Fed's strategy on more than one occasion on Wednesday, saying that the central bank was "making a mistake" by raising rates. In a telephone interview with Fox News later that day, he said he wasn't happy with the Fed, and that it was "going loco" and there was no reason for them to continue to raise rates at the pace they were doing.
International Monetary Fund managing director Christine Lagarde refuted Trump's claims, saying that she "would not associate" Fed Chair Jerome Powell "with craziness."
Thursday's moves come a day after the Dow sank more than 800 points and the S&P 500 dropped more than 3 percent. It was also the 28th time since 2011 the S&P 500 posted a more than 2 percent decline, according to data from Birinyi Associates. The data also shows the broad index has traded higher 59 percent of the time in the following day, averaging a gain of 1 percent. The index also falls 41 percent of the time after such a drop, and averages a decline of nearly 2 percent on those days.
Worries over fast-rising interest rates and a steep tech rout sent U.S. equities tumbling on Wednesday. International markets also fell on Thursday. Asia-Pacific stocks saw sharp declines by the region's market close, while European shares tumbled.