Hot October Inflation Pulls Stocks Lower as Nvidia Drops 5.5 Percent
U.S. stocks closed lower on Tuesday as hotter-than-expected October inflation data raised concern about another Federal Reserve rate increase and gave back part of Monday’s sharp rally. The Dow Jones Industrial Average fell 157.86 points, or 0.30 percent, to 52,231.89. The S&P 500 lost 29.01 points, or 0.38 percent, to 7,520.93. The Nasdaq Composite dropped 187.26 points, or 0.74 percent, to 25,065.88. The small-cap Russell 2000 fell 0.68 percent.
The inflation report set the tone. The Bureau of Labor Statistics said the consumer price index rose 0.4 percent in October from the previous month, above the 0.3 percent economists expected. Core prices, which exclude food and energy, rose 0.3 percent, above the 0.2 percent forecast, for a third straight month at that pace. The report carried no year-over-year figures because the October 2025 government shutdown interrupted price collection.
Rate expectations moved at once. The probability of a December rate increase implied by CME FedWatch futures rose to about 99 percent, and traders began pricing in the possibility of a half-point move. Federal Reserve Governor Christopher Waller had said before the report that a half-point increase should be considered if core inflation rose 0.3 percent or more, and the actual reading matched that threshold exactly.
Bond yields jumped. The yield on the 10-year Treasury note closed at 4.983 percent after touching 5.02 percent during the session, up 11.9 basis points from the previous day. The 2-year yield rose to 4.736 percent. The dollar index gained 0.60 percent.
Technology stocks fell the most. Nvidia dropped 5.47 percent to $168.89 and led Dow decliners. The shares have fallen 9.5 percent in two sessions from Friday’s close of $186.64. The board investigation and the Federal Bureau of Investigation inquiry continue to weigh on the stock. Wells Fargo lowered its price target on Nvidia to $300 from $315 on Tuesday.
Other chip stocks split. Broadcom rose 3.91 percent and Advanced Micro Devices gained 1 percent. Micron fell 1 percent and Intel dropped 2 percent, while the PHLX Semiconductor index held nearly flat a day after jumping 7 percent. Microsoft fell 2.20 percent to $533.16 and Oracle lost 1.51 percent to $117.98. Amazon rose 1.5 percent.
Commodities fell as well. Gold dropped about 1.8 percent to around $4,039 an ounce, and West Texas Intermediate crude slipped about 0.5 percent to around $86.40 a barrel. The Cboe Volatility Index, known as Wall Street’s fear gauge, fell 2.41 percent to 19.44.
Monday had been the opposite. Stocks surged, with the S&P 500 gaining 2.35 percent for its best day since April, the Nasdaq rising 2.74 percent and the Dow climbing 2.15 percent. The rally followed a steep drop in oil prices after President Donald Trump played down the prospect of fresh strikes on Iran.
Wednesday is Veterans Day, and the stock market will be open while the bond market is closed. The producer price index and retail sales are due on Friday. Nvidia reports earnings on Nov. 17.
