Nvidia falls 5.5% on a board investigation, and inflation beats forecasts
Traders priced in a December rate increase, and the two-year yield rose more than the 10-year.
Key takeaways
Tuesday's inflation report showed consumer prices rose more than forecast in October, and CNBC said traders are now fully pricing a U.S. Federal Reserve rate increase in December.
Nvidia fell 5.5% to $168.80 for a second day, and not because of the inflation report. CNBC said investors were weighing the fallout from Chief Executive Jensen Huang's alleged affair, after Nvidia said Sunday that its board had opened an investigation.
A December rate increase
The Bureau of Labor Statistics said consumer prices rose 0.4% in October, after a 0.6% rise in September. Economists polled by Reuters had expected 0.3%. Prices excluding food and energy, the core measure, rose 0.3%, as they had in August and September, against a 0.2% forecast in that same poll.
The bureau published no 12-month rate. It did not collect prices in October 2025, during last year's government shutdown, so this October has no year-ago month to compare.
U.S. Federal Reserve Governor Christopher Waller said Tuesday, before the report, that he would support a quarter-point increase in December, CNBC reported. After the figures, traders fully priced a quarter-point increase at the Fed's Dec. 8-9 meeting, and the chance of a half-point increase rose to 13.6%, from around zero, CNBC reported, citing CME Group's FedWatch tool.
The two-year Treasury yield rose 17 basis points to 4.73%, more than the 10-year yield, which rose 10 basis points to 4.98%.
The 1-year yield rose 18 bp, most on the curve
The two-year rate is the one that moves with the path of the Fed's next steps. BlackRock's iShares 20+ Year Treasury Bond ETF TLT fell 1.3%.
Jake Krimmel, a senior economist at Realtor.com, told HousingWire the report could put upward pressure on mortgage rates again. BlackRock's iShares U.S. Home Construction ETF ITB fell 3.3%.
Nvidia, on its own
Nvidia said the review followed reports that Huang was the target of a foreign intelligence effort, and that he supports it. CNBC, citing the New York Times, said U.S. officials had concluded that the woman in the alleged affair was a Chinese intelligence asset.
VanEck Semiconductor ETF SMH fell 0.8%. Advanced Micro Devices rose 1.3% and Broadcom rose 3.9%. Nvidia fell on its own.
Nvidia fell 5.5% as Broadcom and AMD rose
Microsoft
Microsoft fell 2.2% to $533.16 after Anthropic announced workplace tools, including Claude Meetings, Claude Whiteboards and Claude Sheets. Investor's Business Daily said the launch revived concern that those tools could rival Microsoft's Office software.
GE Vernova
GE Vernova builds gas turbines for data centers. The shares fell as low as $747 and closed down 3.9% at $797.04. Seeking Alpha reported the slide followed SoftBank Group's disclosure of a $3.7 billion charge for changing how it buys power equipment for U.S. data centers.
Sanmina
Sanmina, which builds electronics for cloud and artificial-intelligence equipment, closed up 3.9% at $155.43. The shares traded as high as $167.97, 12% above Monday's close, and gave back most of that gain.
The company's fiscal year ended Oct. 3, so the forecast it issued Monday covers the year now underway. In a release on Monday, Sanmina projected fiscal 2027 revenue of $17.5 billion to $19.5 billion, and profit excluding certain items of $15.50 to $17.50 a share.
"At the midpoint of our full-year outlook, revenue is projected to grow about 27% and our non-GAAP diluted earnings per share about 24%," Chairman and Chief Executive Jure Sola said.
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