Hot US Inflation Fuels Fed Hike Bets; Nvidia Plunges 5.5 Percent
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MENAFNThe US consumer price index (CPI) climbed 0.4% in October from the previous month, topping the 0.3% increase economists expected, though below September’s 0.6% jump. Annual figures were not released. Core CPI, which strips out food and energy, rose 0.3% on the month. That beat the 0.2% forecast but matched September’s pace.
CPI tracks the average change in prices urban households pay for a set basket of goods and services, and is one of the primary gauges of inflation.
Fed board member Christopher Waller voiced support for a rate hike in a speech delivered before the data came out. Fed officials have indicated that at least two more 25-basis-point increases may be necessary, with the pace dependent on near-term economic and financial conditions. Markets had priced in an 87% chance of a 25-basis-point hike in December, but recent comments from Fed presidents have stoked bets on a 50-basis-point move.
US 10-year, five-year and two-year Treasury yields all rose Tuesday. The US Treasury market is closed Wednesday for Veterans Day. The US dollar index gained 0.2% Tuesday to 102.2 and was flat Wednesday. Gold slid 2.7% to $4,031 per ounce Tuesday, then recovered 0.6% to $4,054 Wednesday.
Oil slides on diplomacy hopes
Qatar said progress has been made toward resolving the crisis between the US and Iran. January-delivery Brent crude dropped more than 3.5% Tuesday, briefly sinking below $90 a barrel on hopes for a diplomatic breakthrough in the Middle East before steadying at $91.5. On Wednesday, Brent rose 1% to $92.4 a barrel, lifted by continued attacks in the Strait of Hormuz and expectations of a steeper-than-forecast drawdown in US oil inventories.
The national average price for gasoline in the US fell to $3.98 a gallon, dipping under $4 for the first time since July, according to the American Automobile Association (AAA).
A lasting drop in oil prices could ease inflation in the months ahead through lower energy and transport costs. In the near term, however, a firmer dollar and climbing bond yields are restraining risk appetite.
Wall Street: Nvidia drops, Anthropic eyes record IPO
Anthropic, the developer of Claude, is seeking to raise as much as $64.4 billion in its initial public offering (IPO), which would rank among the largest ever on Wall Street.
US Treasury Secretary Scott Bessent said Washington and Beijing will work together to manage risks tied to artificial intelligence (AI).
US household debt increased 1.8% in the third quarter to $19.1 trillion, according to the New York Fed.
The New York Stock Exchange finished lower Tuesday as inflation worries weighed. Nvidia CEO Jensen Huang was reportedly targeted by foreign intelligence, prompting shareholders to sue both Nvidia and Huang. The suit alleges they misled investors by failing to disclose the executive’s affair with Alice Huang, a former executive at Singapore-based Megaspeed, who is alleged to have gathered intelligence for the Chinese government. Nvidia shares tumbled 5.5%.
CoreWeave shares surged 14.8% in after-hours trading on stronger-than-expected earnings. The Dow Jones Industrial Average slipped 0.3%, the S&P 500 lost 0.38% and the Nasdaq Composite fell 0.7% on Tuesday.
Europe edges higher, except London
European equities ended Tuesday higher, with the UK the lone exception.
Bank of England (BoE) deputy governor Clare Lombardelli said her forecast for the policy rate sits above those of other committee members and that current rate levels are less restrictive than anticipated. She did not rule out back-to-back hikes and said the bank will have more information by mid-December.
Germany’s ifo Institute said Berlin failed to keep its pledge to direct more than half of the new debt raised through private funds into investments such as bridges, roads and climate projects, and instead spent it on routine costs like payroll and bills.
British telecom giant Vodafone cut 3,000 jobs across its European operations between April and September, generating $222.9 million in savings. The company is targeting $2.2 billion in total savings by fiscal 2030, and a further 2,300 positions will be eliminated in Germany.
Germany’s DAX 40 gained 0.31%, France’s CAC 40 added 0.55% and Italy’s FTSE MIB 30 rose 0.69%, while the UK’s FTSE 100 fell 0.29% on Tuesday. European indexes opened Wednesday in positive territory.
Asia mixed as AI fears ease
Asian equities were mixed near Wednesday’s close, with easing worries over AI demand and CoreWeave’s strong results lifting Japanese and South Korean shares. Taiwanese chip giant TSMC climbed 4.2% after approving investments of up to $1 billion from Anthropic and OpenAI.
Japan’s Nikkei 225 advanced 1.3% and South Korea’s Kospi jumped 2.5%, while China’s Shanghai Composite slipped 0.2% and Hong Kong’s Hang Seng lost 0.9%.
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