US equities erased roughly $570 billion to $600 billion in market value at the open and White House National Economic Council Director Kevin Hassett called October’s inflation report “disappointing” as odds of a 50 basis point Fed rate hike in December climbed to 15% on CME FedWatch. The S&P 500 fell 0.66% to 7,500.03, the Nasdaq Composite dropped 0.85% to 25,039.80 and the Dow Jones Industrial Average lost 0.48% to 52,137.28, halting Monday’s equity rebound after the Nasdaq 100 posted a 3.4% gain for its best day since March and the S&P 500 logged its best session since April.
Hassett told Fox Business that price pressures “have accelerated over the last three months” and said “the trickle down from higher energy prices is definitely very palpable in the data.” Three month annualized core CPI climbed to 3.75%, a two and a half year high and up from 1.6% in July, while the 11 month annualized core rate rose to 2.92%. Core goods increased at a 1% annualized pace over the past six months compared with 0.1% for the period ended in June, and shelter rose 0.3% on the month to account for more than 30% of the headline advance.
The selloff followed October consumer price data showing headline CPI rose 0.4% month over month and core CPI increased 0.3% for a third consecutive month, both 0.1 percentage point above consensus estimates. The 0.3% core reading met the threshold Fed Governor Christopher Waller set earlier Tuesday for considering a half point rate increase at the Dec 8 to Dec 9 policy meeting, leaving CME FedWatch pricing an 85% probability of a 25 basis point hike and 15% odds of a 50 basis point move, compared with 84% and 0% on Monday. The Bureau of Labor Statistics omitted official 12 month inflation figures because the 2025 government shutdown prevented October 2025 data collection, though Bloomberg estimates put annual headline CPI at 4.02%.
