What moved
Asia had the big day. Chip and AI stocks rebounded hard: Taiwan's weighted index closed up 7.58%, the Nikkei 225 rose 5.27% and the Kospi 3.55%. Hong Kong's Hang Seng (+0.31%) and the Shanghai Composite (+0.40%) barely joined in.
The rally did not reach New York. Europe was modestly firmer, with the CAC 40 up 0.55%, the Euro Stoxx 50 up 0.59% and the DAX up 0.31%. The FTSE 100 slipped 0.29% as its early gains faded. Wall Street ended lower after a hot inflation reading: the S&P 500 fell 0.38% to 7,520.93, the Nasdaq Composite 0.74% and the Dow 0.30%. All three pared their losses into the close.
Why
October's consumer price index (CPI) decided the US day. Prices rose 0.4% on the month against expectations of 0.3%. Core inflation, which strips out food and energy, rose 0.3% against 0.2%. Beforehand, Fed governor Christopher Waller had said a hot October reading should put a 50 basis-point hike on the table in December, and warned that a quarter-point move alone could put the Fed's credibility at risk. Interest-rate futures now price roughly an 85% chance of a 25 basis-point hike and 15% for 50. The 5-year Treasury yield jumped 14.8 basis points and the 10-year 11.9 basis points to 4.983%. Higher yields reduce what investors will pay today for profits far in the future, which is why technology stocks took the brunt.
Tech also had a problem of its own. Nvidia fell sharply for a second session. Its board is investigating chief executive Jensen Huang over his ties to an executive suspected of links to Chinese intelligence, and there are reports that Nvidia hardware reached Chinese buyers through a network linked to her. In Asia, traders had treated Nvidia's Monday drop as a one-company problem and bought chipmakers anyway. That extended their rebound from Friday's sell-off, which was driven by fears that Democratic gains in the midterms would slow AI spending. New York did not share that confidence.
Lower oil, on hopes of an end to the US-Iran war, was the other support this morning. It lifted Korean airlines and European risk appetite. But Brent eased only 0.64% today, nowhere near enough to offset the inflation print.
Sentiment & risk appetite
The stress was in bonds rather than shares. The MOVE index, which tracks expected Treasury volatility, jumped 7.5% to 92.43, while the VIX for equities actually eased to 19.46. US breadth was poor: across PrimerIQ's universe, 2,168 stocks rose and 3,923 fell. The sector split was clear. The technology sector ETF lost 1.15% while financials gained 0.52% and energy 0.44%. A 0.59% rise in the dollar index, together with higher yields, pushed gold down 1.93% to $4,035, because a metal that pays no interest looks less attractive when yields rise. Asia was the reverse: our breadth there ran at 2.65 rising stocks for every one that fell.
Economic calendar
The October CPI, released this morning, was the day's only major data. Headline prices rose 0.4% and core prices 0.3% on the month, both a tenth above forecasts. Food rose 0.5% and housing 0.3%. There is no annual inflation rate this month, because October 2025 prices were never collected during last year's government shutdown. Nothing else of consequence is due tonight. Wednesday is Veterans Day: US stocks trade as normal but the bond market is closed, so cash Treasuries cannot extend today's move until Thursday.
Earnings
CoreWeave reported after the bell and the shares edged higher in extended trading. Third-quarter revenue of $3.66bn beat the $3.56bn consensus, the loss of $1.27 a share was narrower than the $1.45 expected, and full-year revenue guidance rose to $13bn–$13.3bn. Earlier, TransDigm beat with earnings of $12.44 a share against $11.43 expected. Hims & Hers fell 16.61% after its gross margin dropped sharply and it gave a soft fourth-quarter forecast. Infineon narrowly missed on earnings, but its forecast of more than 20% revenue growth in 2027 lifted the shares.