Hot CPI lifts yields - Nvidia alone accounts for the S&P 500's 0.4% drop

Core consumer prices (excluding food and energy) rose 0.3% in October for a third straight month, sending Treasury yields soaring.

Hours earlier, Federal Reserve Governor Christopher Waller had named that 0.3% pace as grounds to consider a half-point rate increase in December. The two-year Treasury yield, the maturity most tied to Fed expectations, jumped 17 basis points, its biggest one-day rise since April 2025, CNN reported.

Futures traders now fully price a December increase and put the odds of a half-point move at 13.6% after the report, CNBC reported, citing CME Group’s FedWatch tool. The S&P 500 fell 0.4%.

Nvidia’s 5.5% drop subtracted 0.39% from State Street SPDR S&P 500 SPY than the fund lost. SPY was down 0.36% for the day.

October CPI: Core prices rise 0.3% for a third straight month

The U.S. Bureau of Labor Statistics said the general consumer price index (with energy and food prices included) rose 0.4% in October, after a 0.6% rise in September. Economists surveyed by Dow Jones had expected 0.3% on the headline figure and 0.2% for core, CNBC reported.

Shelter rose 0.3% and accounted for more than 30% of the monthly increase. Food rose 0.5%.

The release has no year-over-year rate. BLS did not collect October 2025 prices during last year's government shutdown, so it cannot publish the 12-month comparison this report usually carries. Real average hourly earnings, pay after inflation, were unchanged. Wages and prices both rose 0.4%.

Waller, Logan open the door to a half-point December rate hike

The Federal Open Market Committee, which sets the U.S. Federal Reserve's policy rate, left its target range at 3.75% to 4% on Oct. 28. The committee had raised that range by a quarter point in September, Lorie Logan, president of the Federal Reserve Bank of Dallas, said Tuesday. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in October in favor of another increase. The committee next meets Dec. 8-9.

Federal Reserve Governor Christopher Waller had set his terms before the number arrived. Speaking in London, he said he was leaning toward a quarter-point increase at the December meeting even if October's inflation improved. If the core reading was around 0.3% or higher, like the past two months, he said a stronger move might be needed.

"In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting," he said.

October's core inflation reading was 0.3%.

Logan, speaking in Houston after the report, said the range is still at least half a percentage point too low to start restraining inflation. She said the committee needs at least two more quarter-point increases, and that the pace could be faster this winter than it has been this fall.

"Excess inflation is unacceptable," she said.

Two-year Treasury yield posts biggest one-day jump since April 2025

The two-year Treasury yield rose 17 basis points, or 0.17 percentage points, to 4.73%. The 10-year yield rose 10 basis points, to 4.98%. The 30-year rose 9 basis points, to 5.35%.

The iShares 1-3 Year Treasury Bond ETF SHY fell 0.3%. The iShares 7-10 Year Treasury Bond ETF IEF fell 0.9%. The iShares 20+ Year Treasury Bond ETF TLT fell 1.3%.

Why TLT fell more than SHY when short-term yields rose most

SHY fell least even though the two-year yield rose most. A bond fund’s duration, measured in years, estimates how much its price falls when yields rise. A fund with a 10-year duration loses about 10% for each 1-percentage-point rise in yields. Long Treasury funds such as TLT carry far more duration than short ones such as SHY, so a smaller yield increase still costs them more.

The Securities Industry and Financial Markets Association has recommended a full close for trading in dollar-denominated bonds. SIFMA's recommendation is not a rule.

Shares of TLT can still be bought and sold, because they trade on the stock exchange. The Treasurys inside the fund are not expected to trade. A holder who sells on Wednesday is selling the shares without a live market in the bonds the fund holds.

S&P 500 falls 0.4% as decliners outnumber advancers more than 2 to 1

The S&P 500 closed down 0.38% at 7,520.93. The Nasdaq Composite fell 0.74% to 25,065.87, and the Dow Jones Industrial Average slipped 0.30% to 52,231.89. The Russell 2000 index of small cap stocks lost 0.68% to 2,821.38.

Six of the 11 Select Sector SPDR funds rose, but most stocks fell. Decliners outnumbered advancers by about 2.3 to 1 on the New York Stock Exchange, Reuters reported, and the Russell 2000 index of small companies lost 0.7%.

The State Street Financial Select Sector SPDR ETF XLF rose 0.5%, the best of them. The State Street Technology Select Sector SPDR ETF XLK fell 1.1%, the worst.

Nvidia fell 5.5%, to $168.80. The stock is 7.1% of SPY, and the drop subtracted 0.39 percentage points. The fund fell 0.36%.

Microsoft fell 2.2%. It is 6.2% of the fund and subtracted another 0.14 percentage points. Together the two stocks subtracted 0.53 percentage points, more than the fund fell. The other holdings, taken together, rose.

Nvidia CEO admits affair — with possible Chinese intelligence asset

On Sunday, Nvidia's board said it was opening an independent investigation after reports that chief executive Jensen Huang was the target of a foreign intelligence effort. Huang told employees he had been unfaithful to his wife, CNBC reported.

The New York Times reported Oct. 29 that U.S. officials had concluded Alice Huang, an executive at Singapore-based Nvidia customer Megaspeed, was a Chinese intelligence asset. The board said it had no reason to believe national security or company secrets were compromised. Huang told employees he had been unfaithful to his wife, CNBC reported.

Nvidia shares had already fallen 4.3% on Monday, shortly after the news broke. They fell again on Tuesday, with total losses totaling 9.6% over the last two sessions. CNBC reported that investors were still weighing the fallout, and that a shareholder lawsuit had been filed over the disclosures.

A shareholder filed a proposed class action Monday in federal court in San Jose, California, accusing Nvidia and Huang of misleading investors.

The company reports quarterly results Nov. 17. Three House committee chairs have asked Huang to attend a closed-door briefing the next day, Nov. 18. China’s Foreign Ministry rejected the spying allegation as a smear. President Donald Trump said Monday that the FBI is looking into the matter.

Bond market closes for Veterans Day; stock exchanges stay open

Stock exchanges are open Wednesday, Veterans Day, but the bond market is expected to be largely shut. SIFMA, the securities industry’s trade group, recommended a full close for trading in dollar-denominated bonds, including Treasurys, though each firm decides whether to follow.

TLT and other bond ETFs will still trade on the exchange. Anyone trading them Wednesday will be pricing shares with little or no live market in the bonds they hold.