Wall Street Declines as Nvidia Sell-Off and Hot Inflation Data Fuel Rate-Hike Fears
U.S. stocks retreated on Tuesday, reversing gains from the previous session as hotter-than-expected October inflation data and hawkish remarks from a top Federal Reserve official renewed concerns over aggressive monetary tightening. The major market indices finished the trading day in negative territory, weighed down by a sharp drop in technology shares.
The S&P 500 fell 0.38% to close at 7,520.93, while the Dow Jones Industrial Average dropped 157.86 points, or 0.30%, ending at 52,231.89. The technology-heavy Nasdaq Composite led the losses among major benchmarks, declining 0.74% to finish at 25,065.87.
Market sentiment soured following the release of the consumer price index (CPI), which showed prices rising 0.4% in October, exceeding the 0.3% increase anticipated by economists. Core CPI, which strips out volatile food and energy expenses, also came in higher than expected at 0.3%. In response to the sticky inflation data, Treasury yields climbed, with the 10-year Treasury note yield moving back above 5% as traders priced in a near-certainty of a Federal Reserve rate hike in December and potential additional increases in 2027.
Adding to the pressure, Federal Reserve Governor Christopher Waller stated in a London speech on Tuesday that a December rate hike is likely and left the door open for a possible half-point increase due to persistent inflationary pressures.
Nvidia shares fell more than 7%, briefly pushing the chipmaker's market capitalization below $4 trillion. The stock faced additional headwinds following CEO Jensen Huang's recent acknowledgment of an affair with an alleged Chinese spy, prompting an independent board investigation and heightened scrutiny from investors regarding leadership and export policy compliance.
