Nov. 10, 2026 — U.S. stocks ended lower on Tuesday after stronger-than-expected consumer inflation reinforced expectations that the Federal Reserve will raise interest rates next month, while raising concerns that policymakers could deliver a larger increase to contain persistent price pressures.
The Labor Department reported that the Consumer Price Index (CPI) increased 0.4% in October, exceeding economists’ expectations for a 0.3% rise. It was the third consecutive month that inflation advanced by at least 0.4%, following September’s 0.6% increase.
The report strengthened expectations for tighter monetary policy after several Federal Reserve officials signaled that additional rate increases may be necessary.
Markets were fully pricing in at least a 25-basis-point rate hike at the Fed’s December meeting, compared with an 84% probability on Monday, according to the CME FedWatch tool. Expectations for a larger 50-basis-point increase also emerged, reaching an 11.8% probability after receiving no consideration in the previous session.
Treasury Yields Surge as Rate Expectations Shift
The two-year U.S. Treasury yield, which closely tracks expectations for Federal Reserve interest rate decisions, jumped nearly 18.9 basis points to 4.736%.
The increase put the yield on course for its largest daily gain since April 9, 2025, when markets reacted to President Donald Trump’s sweeping global tariffs.
The rise in borrowing costs came even as oil prices declined to two-month lows after U.S. officials played down the possibility of imminent military action against Iran.
Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, said investors were becoming concerned that the Fed might move more aggressively than previously expected.
“What kind of has the market spooked a little bit is this idea of, ‘Well, we were already pricing in a December hike … but maybe it’s not 25, maybe it’s 50, and maybe the Fed’s more worried about inflation than I am, so let’s sell some stocks,'” Ware said.
He argued that energy costs had been an important driver of recent inflation and suggested that easing oil prices could eventually help moderate price pressures.
Major Stock Indexes Finish Lower
All three major U.S. stock indexes closed in negative territory on Tuesday.
The Dow Jones Industrial Average fell 157.86 points, or 0.30%, to 52,231.89.
The S&P 500 lost 29.01 points, or 0.38%, to 7,520.93, while the Nasdaq Composite declined 187.26 points, or 0.74%, to 25,065.87.
The declines interrupted a two-session recovery for the S&P 500 and Nasdaq, which had rebounded from last week’s sharp losses linked to concerns that government regulation could slow the expansion of AI infrastructure.
Technology Stocks Lead Market Declines
The S&P 500 technology sector was the worst-performing of the 11 major sectors, falling 1.4%.
Nvidia was among the biggest contributors to the decline, with its shares dropping 5.4%. The stock had fallen 9.6% over the previous two sessions.
The chipmaker remains under pressure following an internal investigation into allegations involving CEO Jensen Huang and Chinese businesswoman Alice Huang.
According to a report by The Information, Jensen Huang’s relationship with Alice Huang helped facilitate shipments of at least $7.5 billion worth of Nvidia chips to Chinese companies.
The allegations have raised questions about Nvidia’s leadership, export-control compliance and potential exposure to regulatory scrutiny.
The broader Philadelphia Semiconductor Index experienced a more limited decline of 0.4%, following gains in the previous two sessions, as volatility continued across the AI-related stock market.
Federal Reserve Officials Signal Further Rate Increases
The October inflation report was accompanied by increasingly hawkish comments from several Federal Reserve officials.
Dallas Federal Reserve President Lorie Logan said the central bank needed to deliver at least two additional quarter-point interest rate increases to bring inflation under control. She also suggested the increases might need to happen promptly.
Kansas City Federal Reserve President Jeff Schmid described the current monetary policy rate as “fairly accommodative,” indicating that additional tightening could be appropriate.
Federal Reserve Vice Chair of Supervision Michelle Bowman stopped short of explicitly calling for higher rates but acknowledged that inflation remained the central bank’s top priority.
The comments added to investor concerns that policymakers may be preparing for a more aggressive approach if price pressures remain elevated.
Anthropic’s Potential $64.4 Billion IPO Draws Investor Attention
Investors are also preparing for the expected public listing of artificial intelligence company Anthropic later this month.
The company’s initial public offering could raise as much as $64.4 billion, according to its latest draft prospectus, giving it a fully diluted valuation of up to $1.4 trillion.
The anticipated listing could intensify competition among major AI companies for investor capital and prompt portfolio adjustments as investors decide how much exposure they want to maintain across the sector.
Anthropic’s potential valuation also highlights the enormous amount of capital flowing into the AI industry, even as concerns grow over whether the investment boom will generate sufficient returns.
CoreWeave Earnings Offer Some Relief for AI Investors
Shares of AI cloud infrastructure provider CoreWeave closed down 0.5% but gained approximately 2% in extended trading after the company reported revenue above Wall Street expectations.
Strong demand for its cloud services helped ease some concerns about the sustainability of the AI infrastructure boom and the company’s debt burden.
Despite the after-hours recovery, CoreWeave shares remained down 32% for the year.
The company’s results provided a positive signal for parts of the AI infrastructure market, although broader investor caution continued to weigh on technology stocks.
Market Breadth Shows Widespread Selling
Declining stocks outnumbered advancing issues across major U.S. exchanges.
On the New York Stock Exchange, decliners exceeded advancers by a ratio of 2.27 to 1. On the Nasdaq, the ratio stood at 2.26 to 1.
The S&P 500 recorded seven new 52-week highs and three new lows. The Nasdaq Composite posted 59 new highs and 238 new lows.
Trading volume across U.S. exchanges reached 17.08 billion shares, below the 18.83 billion-share average for full sessions over the previous 20 trading days.
Tuesday’s session reflected a market increasingly sensitive to inflation and interest rate expectations. With the Federal Reserve facing renewed pressure to contain rising prices, investors are weighing the possibility of higher borrowing costs against continued investment in artificial intelligence and the broader technology sector.
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