Daily summary: CPI reading hits markets, hawkish Fed and Wall Street selloff

Macroeconomics and central banks

• Higher-than-forecast US inflation (core CPI +0.3% m/m, headline +0.4% m/m) sparked a hawkish reaction from Fed officials. Christopher Waller allowed for the possibility of a 50 bps rate hike in December, while Lorie Logan advocated for further upward moves, prompting the market to price in continued tightening through mid-2027.
• A sell-off in the debt market pushed 2-year US Treasury yields up by 20 bps to 4.76%, 

Equity markets 

Wall Street came under strong selling pressure following the release of CPI inflation data. The prospect of higher interest rates remaining for longer and rising debt yields pose a serious burden on equity valuations in the coming year, and the rotation of capital out of the tech sector proved insufficient to halt declines across the broader market. As a result:

• S&P 500 falls 0.99%
• Nasdaq 100 falls 1.50%
• Dow Jones falls 0.70%. 

Company news:

• Anthropic, the creator of the Claude model, filed documents for an IPO scheduled for November 18, targeting a valuation of $1.4 trillion on a fully diluted basis and planning to raise up to $90.4 billion with the participation of tech giants (including Google, Microsoft, Nvidia). In Q3, revenue rose to nearly $17 billion, but the company reported an operating loss of $567 million under the weight of massive infrastructure costs and pricing pressure in the AI industry.
• Uncertainty is mounting around Nvidia (NVDA.US) amid reports of an FBI investigation into CEO Jensen Huang and earlier interventions by company lawyers in a government probe regarding chip smuggling. (Down by over 6%)
• Meanwhile, TSMC (TSM.US) reported an impressive 60% increase in monthly sales, confirming its key role in the global expansion of AI infrastructure despite weaker market sentiment.
• Shares of Take-Two (TTWO.US) are gaining on the back of the upcoming release of the highly anticipated trailer and debut of the game GTA VI, scheduled for next week. Investors view the company's recent financial results positively, along with the potential for record revenue from monetizing the title. (Shares rise by nearly 7%)
• Relative strength was observed in European markets earlier in the day, driven by gains in shares of Infineon (IFX.DE), but the afternoon slump on Wall Street dampened investor sentiment. 

Commodities

• Gold prices experienced a sharp sell-off, pulling back near the $4,000 per ounce level under pressure from a rising dollar and a spike in Treasury yields. Speculation regarding hawkish policy tightening by the Fed prompted capital to flee non-yielding reserve assets. (The precious metal loses 3.00%)
• Crude oil prices slid to their lowest levels since late August, influenced by signals of diplomatic de-escalation around Iran and progress in peace negotiations in the UAE. (Brent crude falls 0.60%, and WTI crude drops 0.28%)
• Natural gas futures are gaining value following incoming forecasts heralding a cold snap, which raised concerns about a weather-driven short squeeze. The sudden change in weather forced institutional investors to reduce short positions. (NATGAS gains 3.16%, and European NATGAS.EU rises 6.35%) 

Forex markets

The dollar posted its strongest appreciation session since September, gaining on the back of higher inflation data and hawkish signals from the Federal Reserve:

• The EURUSD exchange rate pulled back sharply toward 1.1150 under the pressure of a widening interest rate disparity between the United States and the eurozone. (Rate falls 0.6%)
• The British pound came under clear selling pressure, with GBPUSD sliding near 1.3335 amid widespread dollar appreciation. (Pound loses 0.8%)
• The Japanese yen continued its downward move under pressure from rising US debt yields, nearing 158.81 per dollar. (Yen loses 0.6%)
• The USDCHF pair broke out dynamically to the upside, representing one of the session's strongest technical moves amid broad appreciation of the US currency. (Pair gains 0.82%) 

Cryptocurrencies

• Bitcoin prices took another dive, falling near $73,000 in the wake of capital flight from risk assets following the inflation data release. The crypto market proved completely indifferent to cheaper oil, succumbing to the pressure of dynamically rising bond yields. (The cryptocurrency loses about 2.5%)
• Ethereum suffered a significantly deeper sell-off, shedding around 5% on a 24-hour basis and deepening its decline over the entire week. 

Geopolitics

• Trilateral peace talks regarding the conflict in Ukraine began in the United Arab Emirates with delegations from Washington, Kyiv, and Moscow; President Volodymyr Zelensky described them as constructive, although the Russian side dampened optimism regarding quick results.