Nvidia fell 7% after the New York Times reported a CEO affair, and the Wall Street Journal reported its board is weighing whether to oust Jensen Huang.
October headline prices rose 0.4% and core prices rose 0.3% for a third straight month, with the 10-year Treasury yield up nearly 10 basis points to 4.95%.
CME FedWatch shows an 11% chance of a 50 basis-point December hike, up from zero a week ago, and 88% for a quarter-point increase.
CoreWeave jumped 10.7% on a smaller quarterly loss than expected, while the S&P 500 rose 0.9% and the Nasdaq Composite rose 1.4%.
Chicago Fed President Goolsbee said inflation has been well above target and that AI investment looks like a form of stimulus.
Nvidia shares tumbled 7% after the New York Times reported that CEO Jensen Huang had an affair with one of Nvidia's vice presidents who reports directly to him, following reports about a relationship with an alleged operative recruited by the Chinese government. The Wall Street Journal reported that Nvidia's board is being scrambled to decide whether Huang would be ousted for workplace misconduct, and the probability of his departure before 2026-end on prediction market Kalshi spiked from 20% to over 50%. Earlier in the session the S&P 500 rose 1.3% and the Nasdaq Composite rose 1.6%.
Chicago Fed President Goolsbee said inflation has been well above target and that it is worth being "sober minded" about inflation and the Fed's response, adding that AI investment looks like a form of stimulus. He noted the market is pricing in 87 basis points of hikes in the year ahead. October headline prices rose 0.4% and core prices rose 0.3% for a third straight month, while Fed Governor Waller said he would consider voting for 50 basis points in December and Dallas Fed President Logan wants at least two more hikes.
Ludovic Subran, chief investment officer and chief economist at Allianz, said he was not surprised by the latest US inflation print and that markets are underestimating a second inflation shock. He pointed to energy pass-through including diesel refining, food inflation and AI-related inflation, and said markets are now pricing three Fed hikes. Chicago Fed President Austan Goolsbee called the report "distressing" and said officials will have to deal with price pressures.
A rebound in artificial-intelligence stocks lifted the US market on Wednesday, with the S&P 500 up 0.9% and the Nasdaq composite up 1.4%, while the Dow Jones Industrial Average was down 56 points, or 0.1%, as of 9:35 a.m. Eastern time. CoreWeave, which rents out access to AI chips over the cloud, leaped 10.7% after reporting a smaller quarterly loss than analysts expected. CEO Michael Intrator said the company has roughly $9 billion in customer prepayments and deposits expected in the next three months, which some analysts said showed progress toward being able to self-fund its business.
The consumer price index rose 0.4% in October from September, more than a Dow Jones consensus estimate of a 0.3% increase. CME Group's FedWatch tool shows an 11% chance of a 50 basis-point hike in December, up from zero a week ago, and expectations for a quarter-point increase stand at 88%, up from 77%. The benchmark 10-year Treasury yield rose nearly 10 basis points to 4.95%.
Goldman Sachs now expects 25 basis-point Fed hikes in December 2026 and March 2027, adding a third hike to the cycle after a third straight month of hot inflation, and has pushed its first rate cut to December 2027. The bank says the March move could come in January but March is slightly more likely, and it expects most FOMC members to signal a third hike in the December dot plot. It still sees inflation meaningfully lower by end-2027 as tariff, energy and AI pressures fade.
Artificial intelligence infrastructure stocks rallied after CoreWeave eased fears about its debt-laden business, with CoreWeave up as much as 20%, Nebius up 15%, IREN up 4.7%, Cipher Digital up 6.0%, Applied Digital up 4.8%, Hut 8 up 1.8% and Oracle up 6.4%. Fossil Group surged after reporting better-than-expected third-quarter results, with adjusted earnings of 23 cents per share versus expectations for a loss of 4 cents, revenue of $271.2 million against a $248.66 million consensus estimate, and a raised 2026 sales forecast. Mosaic fell as much as 2.6% after Freedom Capital Markets cut its recommendation on the fertilizer firm to sell from hold on higher costs.
Nebius shares rose after rival AI infrastructure provider CoreWeave beat Wall Street estimates and raised its full-year revenue forecast. Navient shares fell due to a significant third-quarter earnings miss, a large credit true-up on legacy private loans and rating cuts from Wall Street analysts. Fossil shares climbed 28% after the accessories company reported better-than-expected third-quarter results, including a return to sales growth.
Nasdaq 100 futures rose roughly 1.9% and S&P 500 futures nearly 1%, with S&P 500 futures up 0.94%, Nasdaq futures up 1.86% and Dow futures up 0.30%, as stronger-than-expected CoreWeave results eased concerns about the sustainability of AI infrastructure spending. CoreWeave was up 15% in premarket trading and Fossil was up 25% after earnings, while Nvidia rebounded after losing roughly $430 billion in market value over the previous two sessions. Anthropic outlined plans for an IPO that could value the Claude developer at nearly $1.5 trillion.
Core consumer prices rose 0.3% from a month earlier, topping estimates for a third straight month, while overall prices jumped 0.4%, according to Bureau of Labor Statistics data. The S&P 500 halted back-to-back gains and two-year Treasury yields jumped 18 basis points to 4.74%. Fed Governor Christopher Waller said he backed a December rate hike and would support a half-percentage-point increase if inflation keeps accelerating, while Dallas Fed President Lorie Logan said she still sees the need for at least two quarter-point increases.
