Closing Bell: U.S. Stocks Fall as Inflation Data Points to December Rate Hike

U.S. Stocks fell on Tuesday after October inflation data came in hotter than expected and yields rallied. 

The S&P 500 (SPX) was down 0.38%, while the Nasdaq-100 (NDX) fell 0.60%. The Dow Jones Industrial Average ($DJI) was down 0.30%, while the small-cap Russell 2000 (RUT) fell 0.68%. 

The October Consumer Price Index (CPI) rose 0.4% month over month, a reading that was hotter than the 0.3% economists expected. This further cemented the presence of stubborn inflation. Core CPI, which excludes volatile food and energy costs, increased 0.3% in October, ahead of expectations of a 0.2% advance. The 10-year Treasury yield rose 12 basis points to about 4.98%, after briefly advancing above 5%. 

The price for WTI crude, the U.S. oil benchmark, was down about 0.5% to $86.45 per barrel in Tuesday afternoon trading. 

Three things to watch from Tuesday's market: 

What's Next for Interest Rates as Inflation Rises? 

The CME FedWatch tool now projects a 90% probability that the Federal Open Market Committee will raise its target rate by 25 basis points on Dec. 9, up from 84% Monday. Fed Governor Christopher Waller, speaking in London Tuesday before the data was released, said that inflation is too high, and said if the October inflation data was higher than expected, a 25-basis-point hike could put the central bank's credibility at risk and that a 50-basis-point hike would need to be discussed at the December meeting, according to media reports. Dallas Fed President Lorie Logan Tuesday called for at least two more quarter-point hikes. See Hot CPI Signals Likely Fed Rate Hikes Ahead, Energy Volatility Dominates 

Nvidia (NVDA) Shares Sink as Scandal Sinks In 

Nvidia stock fell more than 5% on Tuesday, bringing the stock's two-day decline to nearly 10%. The company's board of directors is opening an investigation into co-founder and CEO Jensen Huang following revelations that he had a relationship with a businesswoman who U.S. intelligence agencies allege is a Chinese spy. Bank of America removed Nvidia, Micron Technology (MU), and Lam Research (LRCX) from its list of top U.S. stock picks. See Investigation Puts Nvidia (NVDA) Shares in Flux as Tech Rallies  

Tuesday's SPX Advancers and Decliners 

Among S&P 500 sectors, Financials advanced the most, up 0.49%, followed by Consumer Discretionary stocks, up 0.46%. But Information Technology more than erased those gains, down 1.4%, followed by the Materials sector, down 0.55%. Among the biggest moves in the S&P Tuesday: 

Advancers 

• Charter Communications Inc. (CHTR) 10.56% 
• Take-Two Interactive Software Inc. (TTWO) 8.00% 
• EQT Corp. (EQT) 4.79% 
• CVS Health Corp. (CVS) 4.40% 
• Broadcom Inc. (AVGO) 4.16% 

Decliners 

• Skydance Corp. (SKYD) -7.59% 
• Moderna Inc. (MRNA) -6.52% 
• First Solar Inc. (FSLR) -5.55% 
• NVIDIA Corp. (NVDA) -5.47% 
• Lennar Corp. (LEN) -5.00% 

For more on Fed speakers this week, see this week's select economic calendar in Week Ahead: Inflation Data, Neocloud and Space Earnings. Also see 2026's First 'Sell Everything' Day: How NVDA, Other AI Stocks, VIX Hit Markets

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