US rate outlook trumps everything
TLT•US stocks fell on Tuesday after hotter-than-expected inflation sent bond yields higher and raised expectations for faster rate increases. The two-year Treasury yield rose 20 basis points, while the Nasdaq fell 0.7%.
1. Inflation lifts yields
US stocks fell on Tuesday as another bout of unexpectedly hot inflation drove bond yields higher and raised expectations that interest rates could rise faster than expected. The two-year Treasury yield climbed 20 basis points, and the yield curve steepened. The Nasdaq fell 0.7%, the S&P 500 lost 0.4% and the Dow declined 0.3%.
2. Nvidia and Anthropic
Nvidia fell 5.5%, extending its decline from its October 6 record high to 31%, or about $1.7 trillion in market value. Anthropic’s planned IPO valuation is $1.4 trillion on a fully diluted basis and about $1 trillion excluding securities such as stock options and restricted stock.
3. Rate-hike possibility
Federal Reserve Governor Christopher Waller said he could favor a 50-basis-point rate hike next month if October inflation data came in hot. The data released later Tuesday showed brisk consumer-price increases for a third consecutive month.
