U.S. stocks fall as inflation data exceeds expectations
U.S. stock indexes declined Tuesday after October inflation data arrived higher than economists had projected, CNBC reported.
The S&P 500 fell 0.6%, while the Dow Jones Industrial Average dropped 181 points, or 0.3%. The tech-heavy Nasdaq Composite fell 1.1%, according to the report.
The retreat follows a Monday rally in which the S&P 500 posted its strongest daily gain since April, Investing.com reported.
CPI figures show persistent price pressure
The consumer price index rose 0.4% in October, surpassing the 0.3% gain anticipated by economists polled by Dow Jones. Core CPI, which excludes volatile food and energy costs, increased 0.3% in October, exceeding the expected 0.2% advance, according to the data.
After the firm September PCE inflation reading was released last month, Kevin Hassett allowed that October could return to the lower monthly readings seen in the summer, proving September was "a blip." But he added, "if October comes out really high, then I think the Fed would… pic.twitter.com/Gwzryh9R5Y”
Annual figures for the report were not provided due to a 2025 government shutdown, Investing.com noted.
Tom Hainlin, national investment strategist at U.S. Bank Asset Management, told CNBC that the CPI print suggested inflation might remain “a little stickier for a little longer.”
October’s firm inflation reading raises the question of whether Federal Reserve officials will accelerate increases at their December meeting or beyond. A big question—beyond the heavy focus on December (could AI tightening prompt another skip? does 0.4% on core PCE put a 50 in…
Fed official suggests December rate hike
Federal Reserve Governor Christopher Waller indicated in a London speech that a December rate hike is likely, Yahoo Finance reported.
“While the precise timing of the hikes doesn’t matter, ensuring that the promised hikes are implemented in a reasonable period of time does,” Waller said, according to CNBC.
Waller also stated that if October inflation data came in higher than expected, a 50-basis point hike should be considered at the December meeting, Yahoo Finance reported.
Traders now view a December rate hike as a near certainty, with the CME FedWatch tool showing odds for a 50-basis point increase rose to nearly 12%, Investing.com reported.
"But if the October CPI inflation data out later today are similar to the past two monthly readings—with core CPI inflation around 0.3 percent or even higher—then a stronger policy move may be needed. In that case, I believe a 50 basis point hike in the policy rate should be… pic.twitter.com/3kCMy2p0BK”
Investors often monitor the personal consumption expenditures (PCE) price index later this month as the latest reading on the Fed’s preferred inflation gauge.
Nvidia and tech stocks lead market losses
Nvidia dragged down the three major averages, falling 6% according to CNBC. Benzinga reported the stock sank 5.8% to $168.37, which put it on track for its lowest close since March 30.
The decline follows weekend reports regarding CEO Jensen Huang and an alleged affair with a Chinese spy, CNBC reported. Benzinga noted that the drop erased approximately $248 billion from Nvidia’s market value.
Other technology moves included a 2% decline for Microsoft Corp., according to Benzinga.
| Index | Point/Percentage Change |
|---|---|
| S&P 500 | Down 0.6% |
| Dow Jones Industrial Average | Down 181 points (0.3%) |
| Nasdaq Composite | Down 1.1% |
| Russell 2000 | Down 0.9% |
Treasury yields climb amid rate fears
U.S. Treasury yields jumped as investors reacted to the inflation report, Benzinga reported.
The 10-year Treasury note yield advanced back above the 5% mark. The 2-year Treasury yield rose 17 basis points, marking its largest single-day jump since April 2025, according to Benzinga.
Inflation and rate hike FAQ
Why was the annual CPI figure not released?
There were no Y/Y figures published in the CPI data on account of a U.S. government shutdown in October 2025, according to Investing.com.
How much higher was inflation than expected?
Headline CPI rose 0.4% in October compared to the 0.3% forecast, while Core CPI rose 0.3% against the anticipated 0.2%, according to the data provided by Benzinga and Investing.com.
What is the likelihood of a 50-basis point rate hike?
According to the CME FedWatch tool cited by Investing.com, the odds of a 50-basis point hike rose to nearly 12% following the report and comments from Governor Waller.
Investors are now shifting focus toward upcoming Producer Price Index (PPI) data and the personal consumption expenditures (PCE) price index later this month, Investing.com reported.