US indexes slipped as a hot 0.4% CPI print and Nvidia's leadership scandal triggered a sell-off, with the Nasdaq 100 leading declines as 10-year Treasury yields topped 5%.
October CPI rose 0.4% versus the 0.3% forecast, the overshoot Governor Waller said could call for a half-point December hike, with the 10-year yield back above 5% squeezing stock valuations. The Nasdaq 100 fell hardest, giving back about half of Monday's gain to near 27,750, because chip stocks weigh more heavily in it. Further Fed speakers and Friday's PPI can extend or reverse the move.
The hotter-than-forecast October CPI of 0.4% versus 0.3% pushed the 10-year Treasury yield back above 5%, with traders seeing a Fed hike at the December 8-9 meeting as close to certain and talk of a half-point move. Rising rate expectations directly lift benchmark yields. Friday's PPI is the next inflation figure to bear on the decision.
The hot October CPI at 0.4% versus a 0.3% forecast and the 10-year Treasury yield back above 5% weigh on the index, which sits near 7,525 after about a sixth of Monday's rebound was erased. Higher yields reduce what buyers pay for future profits. The index remains about two-fifths of the way back from its November 6 low near 7,325.
Nvidia, the world's most valuable company, is falling after Chief Executive Jensen Huang admitted an affair with a woman accused of spying for China. The drop is dragging all three US indexes lower and weighs disproportionately on the Nasdaq 100 given its large chip weighting. The reputational and governance risk is fresh and its resolution is unclear.
The Dow is near 52,250 after about a sixth of Monday's rebound disappeared on the hot CPI and half-point hike talk. It is less exposed to chip stocks than the Nasdaq 100 and remains near the middle of its 50,500-53,800 range held since mid-September, so the move is milder.
US stock indexes retreated as October CPI rose 0.4%, exceeding the 0.3% forecast and fueling speculation of a half-point Fed rate hike in December. The 10-year Treasury yield climbed above 5%, pressuring valuations. Nvidia shares fell following CEO Jensen Huang's admission of an affair with a woman accused of spying for China, disproportionately impacting the tech-heavy Nasdaq 100.
A hotter-than-expected October CPI of 0.4% versus 0.3% forecast raised the chance of a half-point Fed rate hike in December, and the 10-year Treasury yield rising above 5% also lowers what buyers will pay for future profits. Its heavy weighting in chip stocks, including a falling Nvidia, made it drop more than the other US indexes.
Fed speakers on Tuesday and Thursday, weekly jobless claims and October PPI on Thursday and Friday, all feeding into the December 8-9 Fed decision that traders see as close to certain to hike.
The October CPI rose 0.4%, above the 0.3% forecast, the kind of overshoot Fed Governor Waller said could justify a half-point December hike, and the annual rate returns December 10 after the government shutdown left no October 2025 figure.
Consumer prices rose 0.4% in October against a 0.3% forecast, the kind of overshoot that could justify a half-point Fed rate hike in December, and with the 10-year yield back above 5% stock buyers pay less for future profits, pushing the index lower.
Chief Executive Jensen Huang admitted an affair with a woman accused of spying for China, and the stock, which had lagged Monday's rally, is now falling and dragging down all three US indexes.
No. Chip stocks make up a larger share of the Nasdaq 100, so that index is falling the most, while the Dow stays near the middle of its 50,500-53,800 range.