Wall Street traded lower on Tuesday (November 10), with technology stocks leading losses after hotter-than-expected US inflation data strengthened expectations of another Federal Reserve interest rate increase in December.
Comments from a key Fed official, who left the door open to a larger half-percentage-point hike, added to investor concerns.
The S&P 500 was trading 0.7% lower, while the Dow Jones Industrial Average declined 249 points, or 0.5%. The Nasdaq Composite was down 0.9%.
The October Consumer Price Index (CPI) rose 0.4% month-on-month, compared with economists’ expectations of a 0.3% increase. Core CPI, which excludes volatile food and energy prices, advanced 0.3%, against estimates of a 0.2% rise.
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The Bureau of Labour Statistics did not release annual inflation figures for October as the 2025 government shutdown had disrupted data collection during the corresponding period last year.
The inflation data strengthened the case for further monetary tightening, with investors increasing their bets on a December rate hike. Markets had already fully priced in a quarter-percentage-point increase following comments from Federal Reserve Governor Christopher Waller, who said he supported raising rates at the December meeting.
Waller also indicated that he would not rule out a half-percentage-point increase if inflation continued to accelerate.
The latest data prompted traders to extend those bets, with investors also factoring in the possibility of further rate increases beyond December.
Technology stocks lead Wall Street losses
Technology stocks came under selling pressure, with several major semiconductor companies recording losses. Micron Technology and Marvell Technology fell around 3% each, while Intel declined 2%. Qualcomm lost more than 1%.
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Nvidia shares dropped over 3%. The stock had missed Monday’s market rally following reports involving CEO Jensen Huang, who admitted over the weekend to having an affair with an alleged Chinese spy.
The weakness in technology stocks came even as artificial intelligence company Anthropic said it was seeking to raise up to $64.35 billion through its upcoming initial public offering (IPO).
The fundraising announcement did little to revive investor interest in AI-linked stocks. Investors are also assessing reports that Anthropic is targeting a fully diluted valuation of $1.4 trillion through the IPO. Several major semiconductor companies, including Nvidia, Advanced Micro Devices and Broadcom, are looking to invest in the AI developer.
Fed rate expectations weigh on equities
The October inflation report added to concerns that borrowing costs could remain elevated for longer, putting pressure on equity valuations. The S&P 500 was down 0.6% as of 9:45 a.m. in New York, while the Nasdaq 100 fell as much as 1.3% before trimming losses.
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Investors had expected inflation to ease from September’s elevated reading, but the latest figures offered little relief. Meanwhile, crude oil prices continued to retreat, with West Texas Intermediate crude trading around $85 a barrel.
The combination of persistent inflation, rising interest rate expectations and weakness in technology stocks kept investors cautious, with the December Federal Reserve meeting emerging as the next major focus for Wall Street.
Dow Jones falls 249 points, Nasdaq sheds 0.9% as hotter US inflation weighs on Wall Street