October CPI and Core Inflation Exceed Expectations... NVIDIA Falls 5.5%
CoreWeave Posts 168% Surge in Revenue and Raises Annual Outlook, Yet Net Loss Widens
Wall Street failed to sustain the previous session's sharp rally, closing lower as hotter-than-expected October inflation data stoked fears that the Federal Reserve could adopt a more aggressive path on interest rate hikes, pulling technology stocks down alongside weakness in NVIDIA.
On the 10th (local time), all three major indices declined, with the tech-heavy Nasdaq suffering the steepest drop. The Dow Jones Industrial Average fell 157.86 points (0.30%) to close at 52,231.89. The S&P 500 lost 29.01 points (0.38%) to 7,520.93, while the Nasdaq Composite tumbled 187.27 points (0.74%) to finish at 25,065.87.
The sell-off originated from inflation data. According to the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) for October rose 0.4% from the previous month, outpacing the 0.3% increase expected by Reuters consensus estimates. Core CPI, which excludes volatile food and energy prices, also climbed 0.3%, topping the forecasted 0.2%.
While the headline inflation growth slowed compared to September's 0.6%, core inflation—a key gauge of underlying price trends—rose at the exact same pace for the third consecutive month. Year-over-year figures for headline and core CPI were not published due to data gaps stemming from the government shutdown in October of last year.
Comments from Fed officials exacerbated tightening jitters. Prior to the data release, Fed Governor Christopher Waller stated that if core CPI matched or exceeded around 0.3% month-over-month, a 50-basis-point "big step" rate hike in December should be considered. The actual figures met his benchmark.
Following the CPI release, Dallas Federal Reserve Bank President Lorie Logan expressed her view that rates should be raised by at least another 25 basis points on two more occasions. As rate hike expectations intensified, the yield on the U.S. 10-year Treasury note breached the 5% threshold during the session.
Among individual equities, NVIDIA saw a notable decline. NVIDIA dropped 5.5% in the wake of controversies surrounding CEO Jensen Huang and board investigation reports. Conversely, AMD gained 1.30% and Micron slipped 1.10%, resulting in mixed performances across semiconductor shares.
Declining oil prices failed to provide market support either. Crude prices fell on expectations that the likelihood of additional U.S. strikes against Iran had diminished. West Texas Intermediate (WTI) crude futures dropped $0.81 to settle at $86.04 per barrel, while Brent crude futures fell $1.08 to $91.49 per barrel.
CoreWeave, an AI cloud provider that reported earnings after the market close, experienced rapid revenue growth alongside widening losses driven by heavy interest burdens. Third-quarter revenue surged approximately 168% year-over-year to $3.661 billion, while its full-year revenue outlook was raised to between $13 billion and $13.3 billion. Although operating profit stood at $207 million, net interest expenses reached $846 million, causing the net loss to expand from $110 million a year earlier to $709 million.
Anthropic kicked off its initial public offering (IPO) roadshow on the same day. The targeted price range is set at $70 to $78 per share, with an offering size of 825 million shares. Amid rising volatility in AI-related stocks, the degree of investor demand for such a massive offering remains a crucial variable to watch.
The market's next focal point is the U.S. October Producer Price Index (PPI), scheduled for release on the 13th at 10:30 PM (Korea Standard Time). The indicator will help gauge whether the upward price pressures observed at the consumer level are carrying over into the production stage.
