US stocks fall as inflation data fuels rate hike fears
Higher than expected Consumer Price Index readings have increased expectations for a Federal Reserve interest rate hike in December.
US stocks declined on Tuesday as a higher-than-expected inflation reading strengthened expectations for a December interest rate hike by the Federal Reserve. According to Mint, the Dow Jones Industrial Average fell 223.12 points, or 0.43%, to 52,166.63, while the S&P 500 dropped 0.64% to 7,501.88 and the Nasdaq Composite fell 1.15% to 24,962.44.
The US Labor Department reported that the Consumer Price Index rose 0.4% last month, exceeding the 0.3% estimate from economists. This marks the third consecutive month where the index increased by 0.4% or more, following a 0.6% rise in September.
Federal Reserve Governor Christopher Waller suggested the central bank should increase short-term borrowing costs in December regardless of whether inflation cooled last month. Waller also noted that an upsized half-point hike should be considered if inflation worsens. Dallas Federal Reserve President Lorie Logan also stated the Fed may need to implement at least two more quarter-percentage-point increases promptly.
Jason Ware, chief investment officer at Albion Financial Group, said the market may be selling stocks due to concerns that the Fed might implement a 50 basis point hike instead of 25. Markets are currently pricing in a rate hike of at least 25 basis points for the December meeting.
In the technology sector, the S&P 500 tech index fell more than 1%, with Nvidia shares dropping over 5%. Meanwhile, AI lab Anthropic is expected to raise as much as $64.4 billion in its initial public offering later this month.
