CPI Stays Hot, Rate Hike Odds Rise, Stocks Fall
Published as of: November 10, 2026, 9:26 a.m. ET
(Tuesday market open) October inflation came in hotter than expected. The Consumer Price Index (CPI) rose 0.4% monthly while core CPI excluding food and energy climbed 0.3%. Analysts had expected 0.3% and 0.2%, respectively. Major indexes—mixed before the news after Monday's fierce rebound—turned mostly red after the hotter-than-expected data as investors increasingly look for tighter Federal Reserve policy.
"I think this all but ensures a rate hike in December," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). Treasury note yields jumped on the news, climbing about seven basis points for the 10-year note to 4.94%. Later today, investors await results of a 10-year Treasury note auction. Any sign of soft demand might push yields up more.
The S&P 500 Index see-sawed Monday between Nvidia (NVDA) and most other components, with Nvidia scraping the dirt on controversy surrounding its CEO while practically everything else touched the sky. Nvidia toppled 4% as the S&P 500 Index enjoyed its best advance-to-decline spread of the year. Nvidia competitors Advanced Micro Devices (AMD) and Broadcom (AVGO) posted dramatic gains on Nvidia's trip to the woodshed. The idea, at least on Monday, was that if Nvidia falters, others could pick up the slack.
Three things to watch
CPI deeper dive: CPI lacked year-over-year data due to last year's government shutdown, while energy prices drove the monthly gain in headline inflation. Under the surface, food prices rose 0.4%, posssibly a combination of tariffs and higher oil prices. The rise in diesel costs might be filtering into other parts of the economy judging from an increase in transportation services costs. Medical care goods also rose, along with new cars, though used car and truck prices fell. Before CPI, Fed Gov. Christopher Waller said he thinks a December rate hike is likely and raised the possibility of a bigger move than 25 basis points. However, that isn't the base case now. Several more Fed speakers line up later today, and if others mention 50 basis points, the market might feel more pressure. After CPI and Waller's remarks, chances of a rate hike next month hit nearly 100%, according to the CME FedWatch Tool, versus 84% Monday. Bond trading is closed tomorrow for Veteran's Day, while items after that with potential to move yields include Thursday's 30-year bond auction and Friday's Producer Price Index (PPI).
Nvidia controversy weighed before earnings: The fallout from CEO Jensen Huang's affair with an alleged Chinse spy likely outweighs all other topics on Nvidia's earnings call a week from today. Shares are down nearly 30% from last month's highs, hurt along with the rest of the chip sector by concerns about AI spending and data center policy. Those subjects likely take a back seat depending on where the allegations lead. Every controversy is different and this one doesn't have many obvious antecedents. At root, this is a governance and headline risk around the biggest name in AI, with much of the AI chip manufacturing, financing, and buildout going through Nvidia. While the fundamentals haven't changed yet, this sector was already shaken, so the next tests may be earnings from CoreWeave (CRWV), Cisco (CSCO) and Applied Materials (AMAT) this week, followed by Nvidia's results next Tuesday. The thinking on Wall Street is that Huang may be hard to replace if things worsen. He's arguably a singular figure in AI with close relationships to many other players and high-level U.S. officials. Nvidia has never shared a succession plan for Huang, 63, who co-founded the company in 1993.
- Key levels to watch after wild week: Technically, the sell-off Thursday came after the S&P 500 Index tested and failed to claw past its then-50-day moving average of 7,690. Buying support arrived when it tested its 200-day moving average of 7,330. The next zone of resistance could be in the old support area between 7,600 and 7,620, while taking out the 50-day moving average above that—now at 7,670—would be a key clearing event. A hot CPI might test the SPX, with 7,500 a level to watch below as the market reacts to CPI. Thursday's bloodbath took the forward price-to-earnings (P/E) ratio of the S&P 500 down to 17.8, about 1.4 points below the average over the last 10 years and the lowest since late 2023. However, a lower P/E ratio doesn't necessarily suggest a market bottom. One related metric to watch in coming weeks is whether major companies start adjusting forward earnings and margin guidance, especially after the recent tech weakness. If estimates begin falling, it could suggest valuations aren't as low as they now appear.
On the move
Nvidia (NVDA) inched lower by less than 1% early after several Wall Street firms cut their price targets on the firm in the wake of its CEO scandal and President Trump said the FBI is investigating. This follows yesterday's drop of more than 4%. At the same time, analysts expect Nvidia to deliver solid results next week, though margins face scrutiny due to rising prices.
Shares of Nvidia competitors Broadcom and Advanced Micro Devices which soared yesterday on fallout from their rival's troubles, came back to earth this morning, falling about 1% each.
Chip and AI-related stocks generally fared poorly this morning after yesterday's dip-buying rebound. Besides Nvidia, shares in the red included Corning (GLW) down 3%, Lumentum (LITE) down 3.2%, Sandisk (SNDK) down 2%, and Applied Digital (APLD) down 2.6%. The PHLX Semiconductor Index (SOX) rose nearly 7% yesterday, so it's not surprising to see it backtrack a bit today.
Taiwan Semiconductor Manufacturing (TSM) fell slightly after reporting a 59.7% year-over-year revenue increase for October.
CoreWeave, a "neocloud" firm, fell 1.6% early ahead of this afternoon's earnings data. Investors will likely want to hear about its relationship with Nvidia, data center demand trends, and how it's handling higher borrowing costs.
Other AI-adjacent firms, especially in energy, felt pressure early, with GE Vernova (GEV) down 8% and Bloom Energy (BE) down 3%. Teradyne (TER) fell 2%.
Rocket Lab (RKLB) plunged 9% despite better-than-expected revenue and guidance along with a quarterly loss that was narrower than consensus. SpaceX (SPCX), a competitor, dropped 1.7%. Today's RKLB loss follows a big gain yesterday and may be profit-taking. Two firms lowered their price targets.
On Holding (ONON) backtracked 5% in early trading despite topping consensus on profit and sales. The running shoe maker also raised its gross margin estimate. Shares hit nearly three-month highs last week.
AAON (AAON) surged 15% early following strong results from the heating, air conditioning, and ventilation equipment maker.
The Atlanta Fed's GDPNow estimate for fourth quarter gross domestic product rose to 3.5% yesterday from the prior 3.4%. The average analyst estimate is near 2%.
All 11 S&P sectors rose Monday, even energy despite the burden of weaker oil. Cyclical areas like industrials and discretionary led, while tech climbed 3%. Financials are up more than 1% over the last week and 6% over the last month, possibly on hopes for a better deal-making and capital markets environments.
- The October Schwab Trading Activity Index™ (STAX) rose to 61.94, from 58.92 in September, the highest in more than four years. After favoring exchange-traded funds (ETFs) in September, clients tracked by the proprietary, behavior-based index turned back to individual stocks in October. Popular names included many tech and AI-related stocks that took a dip amid funding concerns.
More insights from Schwab
AI earnings approach, led by Nvidia: The next wave of the earnings season arrives this week and next, highlighted by Nvidia next Tuesday. AI infrastructure demand remains robust, but signs of moderating hyperscaler spending growth could pose challenges for chipmakers moving forward. Learn what else to watch in our Q3 Tech Earnings Preview.
Possible outcomes of the AI innovation cycle: The latest research from SCFR explores four potential scenarios for AI evolution in light of rapid expansion and heightened capital spending.
Crypto spotter's guide: The five spot cryptocurrencies available to trade on Schwab's platform come with significantly different investment prospects. Our new cryptocurrency analysis helps investors evaluate various supply dynamics and demand drivers behind each coin.
CPI in focus: In our Week Ahead video, learn some considerations to keep in mind while digesting today's CPI data, including lack of year-ago comparisons. Kevin Gordon, head of macro research and strategy at SCFR, explains the stubborn inflation climate heading into the report.
Getting your estate in order: Estate plans aren't exclusively for the wealthy. In fact, everyone should have their affairs squared away for the sake of their loved ones. The latest episode of the Financial Decoder podcast shares key estate-planning tips.
Chart of the day
Data source: ICE. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The PHLX Semiconductor Index (SOX—candlesticks) hasn't made it back to last Tuesday's election day closing level yet, but did make a good deal of progress Monday. Meanwhile, the small-cap Russell 2000 Index (RUT—purple line) has topped its election day close.
The week ahead
Tuesday, November 10: October CPI and core CPI and expected afternoon earnings from CoreWeave (CRWV) and Rigetti Computing (RGTI).
Wednesday, November 11: No major earnings or data expected. U.S. bond market closed for Veterans Day.
Thursday, November 12: October existing home sales and expected morning earnings from Brookfield (BN) and Nebius (NBIS). Expected afternoon earnings from Cisco (CSCO) and Applied Materials (AMAT).
Friday, November 13: October PPI and core PPI.
Monday, November 16: Expected morning earnings from Baidu (BIDU) and Tyson Foods (TSN).
Tuesday, November 17: October industrial production and capacity utilization and expected morning earnings from Home Depot (HD) and Walt Disney (DIS), and afternoon earnings from Nvidia (NVDA).
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