U.S. stocks opened lower due to high inflation and expectations of a rate hike

Stocks on the U.S. stock market fell at the start of trading on November 10: all major indices were in the red. The Nasdaq Composite Index, which is heavily weighted toward technology companies, fell by about 1.2%, though it later slowed its decline to 0.8%. The broad-market S&P 500 index fell 0.6%, while the Dow Jones Industrial Average—a blue-chip index—dropped 0.5%. The Russell 2000 index, which tracks small- and mid-cap companies, lost 1.1%.

Stocks began to fall after the release of a higher-than-expected Consumer Price Index (CPI): it rose 0.4% month-over-month in October, although economists had expected a 0.3% increase. Year-over-year figures were not reported because data collection in October 2025 was disrupted by the U.S. government shutdown.

Inflation data has convinced traders that a Federal Reserve rate hike at its December meeting is inevitable, and the only question is by how much the rate will be raised. Market participants believe there is an 85% probability of a 25-basis-point rate hike—bringing the range to 4–4.25%—and a 15% probability of a 50-basis-point hike, according to the FedWatch tool. Prices do not currently reflect the possibility of the rate remaining unchanged.

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This article was AI-translated and verified by a human editor