The key facts

  • Dow, S&P 500 and Nasdaq opened lower, VIX rose 5.62%
  • US inflation for October: 0.4% (forecast 0.3%), core — 0.3%
  • Waller leans toward a 0.25 percentage point hike in December, not ruling out 0.5 percentage points

Markets reacted to inflation and Fed signals

US stock indices opened lower on Tuesday amid stronger-than-expected inflation data and comments from a Federal Reserve governor that heightened concerns about further rate hikes, Anadolu reports. The Dow Jones index fell 148.31 points (0.28%) to 52,241.44, the S&P 500 lost 43.05 points (0.57%) to 7,506.89, and the Nasdaq Composite dropped 209.73 points (0.83%) to 25,043.41. The VIX volatility index rose 5.62% to 21.04.

Inflation data and Waller's position

US consumer prices rose 0.4% in October — slower than the 0.6% in September, but above the market expectation of 0.3%. Core inflation, excluding food and energy, came in at 0.3%, unchanged from September and above the forecast of 0.2%. Annual figures were unavailable: due to the 2025 government shutdown, October data was not collected last year. Fed Governor Christopher Waller said in London before the data release that he leans toward supporting a 0.25 percentage point rate hike at the December meeting, even if inflation improves. At the same time, according to him, if core October inflation comes in at around 0.3% or higher, a 0.5 point hike should be considered: a smaller step in such a situation, he warned, could jeopardize confidence in the central bank.

Technology sector leads the decline

The retreat on Wall Street was led by technology stocks: Marvell Technology lost about 5%, Intel and Micron Technology about 3%, Advanced Micro Devices and Qualcomm more than 2%, and Nvidia over 4%. The decline followed a strong rebound on Monday, when the S&P 500 posted its best day since April.