Wall Street opened lower on Tuesday, 10 November, as stronger-than-expected US inflation data revived concerns about further interest rate increases, threatening the recovery in technology stocks following last week’s sharp market sell-off.
The Dow Jones Industrial Average fell 226.5 points, or 0.43%, to 52,163.21 at the opening bell, while the S&P 500 declined 36.8 points, or 0.49%, to 7,513.09.
The technology-heavy Nasdaq Composite dropped 205.7 points, or 0.81%, to 25,047.45, with semiconductor shares among the early fallers.
The downturn followed the release of October’s US consumer price index figures, which showed monthly inflation of 0.4%, above economists’ expectations of 0.3%.
Although price growth slowed from September’s 0.6% increase, the latest reading reinforced concerns that inflation remains persistent despite restrictive monetary policy.
The figures added to uncertainty over the Federal Reserve’s next interest rate decision, particularly after Fed Governor Christopher Waller indicated that he would support a 25-basis-point increase in December, even if inflation showed signs of easing.
Waller also suggested that a larger increase could warrant consideration if underlying price pressures remained elevated.
Technology stocks were particularly sensitive to the inflation figures, as higher borrowing costs can place pressure on growth-company valuations and increase financing costs for capital-intensive projects.
Nvidia shares fell 4.12% to $171.31 in early trading, extending recent losses amid continuing scrutiny of Chief Executive Jensen Huang and wider concerns surrounding artificial intelligence investment.
The semiconductor giant has faced renewed questions over corporate governance following reports involving its chief executive and allegations of a possible foreign intelligence operation.
However, Nvidia has said it has no reason to believe its confidential information or US national security secrets were compromised.
Intel also declined 1.11% to $58.71, reflecting weakness across parts of the semiconductor sector.
In contrast, CoreWeave gained 0.69% to $49.32 ahead of its quarterly results, demonstrating some resilience among companies exposed to AI infrastructure demand.
The mixed performance highlighted continued investor selectivity following the recent volatility in technology shares.
Tuesday’s weaker opening interrupted Wall Street’s two-session recovery, with investors reassessing the outlook for borrowing costs and the potential impact of persistent inflation on company earnings.
The Federal Reserve’s December meeting is now a key focus, with further economic data likely to influence whether policymakers favour a quarter-point increase or a more aggressive response.
The immediate question for markets is whether technology stocks can stabilise despite renewed inflation concerns, particularly as investors await CoreWeave’s results and further signals from Federal Reserve officials.
