US stocks fall as inflation data boosts bets on larger Fed rate hike
Core CPI, which strips out volatile food and energy prices and is referred to as 'underlying inflation', came in at 0.3%, above the 0.2% consensus.
US stocks plunged on Tuesday as a hotter-than-expected US inflation reading bolstered expectations for a larger Federal Reserve interest-rate hike next month. Nvidia's shares tumbled for a second day straight, prompting concerns over CEO Jensen Huang's future amid a spying probe. Treasury yields surged and the dollar strengthened against major currencies while gold prices fell.
The US Consumer Price Index rose 0.4% in October, exceeding expectations, while core CPI, which excludes volatile food and energy prices, came in at 0.3%, surpassing forecasts. Fed officials now see a 0.3% pace of underlying inflation in October, potentially triggering a half-point rate increase at their December meeting. Lower oil prices have helped mitigate some inflation concerns, but analysts warn about the impact of AI-driven labor costs on prices.
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