Overview
- The Labor Department reported consumer prices rose 0.4% in October, above forecasts, and core CPI increased 0.3%, a reading that markets interpreted as evidence that inflation remains stubborn.
- Markets quickly priced in a roughly 80–85% chance of a 25 basis-point Fed hike in December as two-year Treasury yields jumped about 13 basis points and the 10-year approached the mid-4% range.
- The stronger inflation print followed an unexpectedly firm October jobs report last week that showed nonfarm payrolls rose 165,000 and the unemployment rate fell to 4.1%, strengthening the case for tighter policy.
- Oil prices fell after President Trump said he would hold off on further strikes against Iran, which briefly eased inflation worries and helped lift global equities even as tech stocks were pressured by a developing probe at Nvidia.
- Investors will watch how higher yields affect borrowing costs for households and businesses, whether falling oil keeps downward pressure on prices, and Nvidia’s board probe and next week’s tech earnings for further market-moving news.