By Priya Raman

U.S. stocks fell after October core consumer prices rose 0.3%, ahead of the 0.2% increase economists expected, as the inflation surprise and renewed Federal Reserve guidance put a larger December rate increase back in view.

The S&P 500 traded down 0.7% on Tuesday. The Nasdaq Composite slipped 0.9%, the Dow Jones Industrial Average declined, and technology stocks led the retreat. Treasury yields—the interest rates on U.S. government debt—rose after the CPI release, according to CNBC.

What did the inflation report show?

The consumer price index (CPI), the broad measure of prices paid by consumers, rose 0.4% in October. That gain was slower than September’s 0.6% but faster than the 0.3% forecast in a Dow Jones economist poll, CNBC reported.

Core CPI, which excludes food and energy, increased 0.3%, exceeding the 0.2% consensus forecast cited by CNBC. The result gave policymakers an upside inflation surprise even as the headline monthly rate cooled from September.

The 2025 government shutdown removed the annual inflation figures from the report. The omission left the release without year-over-year price comparisons, while its monthly readings were followed by rising yields and falling equities on Tuesday.

That mix made the report less reassuring than the 0.4% headline figure alone. September had recorded 0.6%, so October slowed; core prices, however, rose 0.3% against a 0.2% forecast, leaving the policy signal more cautious than a simple headline comparison would suggest.

What did Waller signal about December?

Federal Reserve Governor Christopher Waller said a rate increase in December was probable and did not rule out a half-point, or 0.5 percentage-point, move. “While the precise timing of the hikes doesn't matter, ensuring that the promised hikes are implemented in a reasonable period of time does,” Waller said, according to CNBC.

Once the CPI data arrived, traders assigned about 10% odds to a half-point increase at the December meeting, The Wall Street Journal reported. The 10% figure showed that a larger move remained a minority outcome, not the market’s central case.

The market response joined three developments: core CPI at 0.3% exceeded the 0.2% forecast, Treasury yields rose after the release and a 0.5-point hike became more plausible as Waller spoke. Technology stocks led Tuesday’s decline.

Which technology shares bore the selling?

• Micron Technology and Marvell Technology each fell 3%.
• Intel lost 2%.
• Qualcomm slid by more than 1%.
• Nvidia fell more than 3% after sitting out Monday’s rally.

Micron and Marvell’s 3% declines, Nvidia’s loss above 3% and Intel’s 2% fall all exceeded the S&P 500’s 0.7% drop; Qualcomm’s decline of more than 1% also topped the broader index move. The losses were concentrated in the technology names that CNBC identified as the session’s leaders.

In a separate company development, CNBC reported that Nvidia CEO Jensen Huang acknowledged an affair with a woman suspected of spying for China. The report did not quantify any effect on Nvidia’s business or explicitly link the disclosure to the stock’s 3%-plus decline.

What followed Monday’s rally?

The S&P 500 had posted its best day since April on Monday, according to CNBC. Before that rally, traders had become uneasy that data-center construction—large facilities housing computing infrastructure—might slow after Democrats’ sweeping victories in the midterm elections.

Tuesday’s 0.7% decline therefore came after a sharp one-session reversal. The inflation report and Waller’s comments supplied the immediate macro pressure, while the earlier concern about post-election data-center activity remained a separate issue for the technology investment outlook.

The market entered the inflation data with two distinct questions: whether a 0.3% core reading would keep a half-point December hike live and whether political change might restrain data-center construction. Tuesday’s half-point pricing was about 10%, while the building outlook remained uncertain. The session left a higher-yield backdrop, a technology-led sell-off and less clarity on both the path of inflation and the pace of infrastructure growth.