U.S. stocks fell on Tuesday after an inflation report showed prices were higher last month than economists expected.
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U.S. stocks dipped Tuesday as a new inflation report showed prices across the country were worse than economists had expected for last month. The S&P 500 slid 0.4% and gave back some of its big rally from the day before.
Bond-market pressure followed the report, weighing on equities. Investors said the discouraging inflation reading could push the Federal Reserve to raise its main interest rate when it meets in December and beyond, since higher rates can cool inflation by making borrowing more expensive and slowing economic activity.
The outlook for interest rates also drew attention after Fed Governor Christopher Waller said in London ahead of the report that a stronger policy move may be needed if an underlying inflation measure rose by 0.3% from September. The report showed that underlying measure was exactly 0.3%, matching the threshold Waller had referenced.
Yields jumped after the data. The yield on the 10-year Treasury rose to 4.99% from 4.88% late Monday, a move that can affect borrowing costs for mortgages and other loans. The 10-year yield had been falling since early October, when it topped 5.30%.
Oil prices fell again even as yields rose: Brent crude dropped 1.2% to $91.49 a barrel. President Donald Trump said late Monday that the war in Iran, which had pushed oil prices higher, “militarily is effectively over.”
Higher borrowing costs were reflected across sectors, with homebuilding stocks among those lagging. Lennar fell 5.4%, while D.R. Horton dropped 3.8% and PulteGroup fell 3.9%. Builders FirstSource, which sells homebuilding materials, sank 4.6%.
Tech also took a hit. Nvidia, the single heaviest weight on the S&P 500, fell 5.5%. The stock has been under pressure since its board announced an investigation into CEO Jensen Huang, after he admitted to a relationship with a woman described as gathering information for China.
Artificial-intelligence related stocks were mixed amid broader concerns. GE Vernova fell 3.9%, Micron Technology dropped 1.1%, and CoreWeave slipped 0.5%, while Broadcom rose 3.9% and Advanced Micro Devices gained 1.3%.
The S&P 500 fell 29.01 points to 7,520.93, the Dow Jones Industrial Average dipped 157.86 points to 52,231.89, and the Nasdaq composite declined 187.26 points to 25,065.87.
Outside the U.S., indexes rose across much of Europe and Asia, including South Korea’s Kospi, which jumped 4.4%.
In South Korea, the Kospi’s gain was driven by strength for two tech giants that have benefited from the AI boom, Samsung Electronics and SK Hynix.
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