Highlights
Stocks receded on Tuesday after a hotter than expected inflation report renewed rate hike worries. The Dow Jones industrial average eased 0.3 percent, the S&P 500 dipped 0.4 percent, and the Nasdaq was off 0.7 percent. Bond yields and the dollar jumped while oil prices declined.
News that consumer prices rose 0.4 percent in October, with core consumer prices up 0.3 percent, both above expected, aggravated inflation worries. The report also showed inflation pressures due to higher energy prices spreading to more sectors. The inflation news followed Federal Reserve Governor Chris Waller’s remark that a hotter than expected CPI reading might warrant a 50 basis point Fed rate increase in December, more than the expected 25 basis points. Investors are pricing in a 25 basis point move in December from the Federal Reserve and after Waller’s comments and the hot CPI, they are looking for more aggressive rate moves in 2027.
An additional selloff in beleaguered Nvidia, the AI leader, added to the downward pressure in markets. Tuesday's losses also reflected profit-taking after a huge rebound in stocks on Monday.