US yields climb, stocks fall as inflation data boosts chances for larger Fed rate hike
SPY•US inflation ran hotter than expected in October, lifting Treasury yields and strengthening bets on a half-point Fed rate hike in December. The S&P 500 fell 0.38%, the Nasdaq dropped 0.74% and the Dow lost 0.30%.
1. Inflation lifts yields
US Treasury yields jumped after October’s Consumer Price Index rose 0.4%, above economists’ 0.3% forecast; core CPI increased 0.3%, also above expectations. The two-year yield rose 18.44 basis points to 4.731%, while the 10-year yield gained 12.55 basis points to 4.988%. Bets on a half-point rate hike at the Fed’s December meeting increased after the data.
2. Stocks and commodities fall
The Dow fell 157.86 points to 52,231.89, the S&P 500 dropped 29.01 points to 7,520.93 and the Nasdaq declined 187.26 points to 25,065.87. Nvidia fell sharply for a second day as investors worried about CEO Jensen Huang’s future amid an internal probe. Gold dropped 2.62% to $4,030.56 an ounce, while the dollar strengthened; oil prices also ended lower.
