Stocks join bonds lower on inflation, Fedspeak: Markets wrap
By Rita Nazareth
(Bloomberg) — A faster-than-estimated increase in inflation fuelled bets the Federal Reserve will keep boosting rates, spurring losses in stocks and bonds.
The S&P 500 halted back-to-back gains, with most of its firms dropping. Short-dated Treasuries bore the brunt of the selling, with two-year yields jumping 18 basis points to 4.74%. Money markets added to wagers on at least two Fed hikes by mid-2027 — and started to price in a small chance of a jumbo-sized half-point move in December. The dollar rose. Oil fell.
The consumer price index, excluding food and energy, rose 0.3% from a month earlier, according to Bureau of Labor Statistics data, topping estimates for a third straight month. Overall prices jumped 0.4% as the cost of essentials climbed across the board.
Before the data, Fed Governor Christopher Waller said he backed a rate hike in December, and warned that if inflation continues to accelerate he would support a half-percentage-point increase to protect the central bank’s credibility.
Later Tuesday, Fed Bank of Dallas President Lorie Logan said she still sees the need for at least two quarter-point rate increases, but that the pace of those hikes may need to be quicker than the Fed is moving this fall.
“The Fed could push for a more-aggressive tightening cycle with CPI continuing to print strong,” said Lindsay Rosner at Goldman Sachs Asset Management. “A December hike is our firm base case despite wider AI jitters, and stubborn inflation means we cannot rule out further hikes in 2027.”
While a December hike looks locked in, the latest data don’t settle the argument for an outsized move, according to Seema Shah at Principal Asset Management. That would require evidence that inflation is accelerating decisively, expectations are becoming unanchored or the economy is overheating.
“We are not there yet,” she added. “Chris Waller has put 50 basis points on the table, and today’s numbers give that debate credibility. For now, however, the broader picture still favours a more cautious approach.”
All of this matters for markets, because a more patient Fed would be easier for stock bulls to navigate, while a more aggressive Fed could prove to be too big of a headwind for the market to overcome next year, said Chris Zaccarelli at Northlight Asset Management.
Markets have handled elevated Treasury yields better than many investors expected, but that resilience could be tested if markets begin pricing in multiple rate hikes, according to Bret Kenwell at eToro.
“The bigger risk is not simply higher yields, but a higher rate path,” he said. “That could create another headwind for equities at a time when volatility in the AI trade has already weighed on the major indices, even as the broader rotation outside of tech has been resilient.”
Corporate Highlights:
- Anthropic PBC is seeking a fully diluted valuation of about US$1.4 trillion in its initial public offering, in a bid to make history as the first frontier artificial intelligence lab to go public.
- Goldman Sachs Group Inc. research analysts are modelling for Anthropic’s revenue to soar to roughly $685 billion by the end of the decade, according to a person familiar with the estimates.
- Nvidia Corp.’s general counsel intervened in a U.S. government probe of suspected smuggling of AI chips by Megaspeed International, questioning whether the Trump administration played a role in detaining an executive from the Singapore-based firm who’s now at the heart of a scandal threatening Jensen Huang.
- CoreWeave Inc. faces a high bar to convince Wall Street that the AI trade is alive and well when it reports earnings after the bell.
- Taiwan Semiconductor Manufacturing Co. posted a 60% increase in monthly sales, reflecting the company’s central role in a global AI infrastructure buildout.
- SoftBank Group Corp. reported its first net loss in almost two years after the tech investor swallowed a US$3.7 billion write-down over its U.S. data-centre projects and AI valuations dipped around the world.
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.7% as of 10:58 a.m. New York time
- The Nasdaq 100 fell 0.8%
- The Dow Jones Industrial Average fell 0.6%
- The Stoxx Europe 600 rose 0.5%
- The MSCI World Index fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index rose 0.5%
- The euro fell 0.6% to $1.1160
- The British pound fell 0.8% to $1.3338
- The Japanese yen fell 0.5% to 158.69 per dollar
Cryptocurrencies
- Bitcoin fell 2.3% to $73,217.54
- Ether fell 4.9% to $2,024.2
Bonds
- The yield on 10-year Treasuries advanced 10 basis points to 4.99%
- Germany’s 10-year yield advanced three basis points to 3.29%
- Britain’s 10-year yield advanced seven basis points to 5.20%
Commodities
- West Texas Intermediate crude fell 1.5% to $85.59 a barrel
- Spot gold fell 2.3% to $4,043.91 an ounce
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Last modified: November 10, 2026
