New York stock market falls due to concerns over inflation and the Fed's 'Big Step'... Nasdaq 0.7%↓ (comprehensive)

On the 10th (local time), the New York stock market fell in the aftermath of October's price index exceeding market expectations and hawkish remarks from high-ranking Federal Reserve officials.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 52,231.89, down 157.86 points (0.30%) from the previous day.

The Standard & Poor's (S&P) 500 Index closed at 7,520.93, down 29.01 points (0.38%) from the previous day, and the Nasdaq Composite Index closed at 25,065.87, down 187.26 points (0.74%).

The October Consumer Price Index (CPI) announced by the U.S. Department of Labor on this day rose 0.4% compared to the previous month, and the core CPI excluding highly volatile energy and food rose 0.3%, exceeding expectations.

As inflationary pressures remain strong, caution about the Federal Reserve's December interest rate hike has spread.

Federal Reserve officials have repeatedly signaled the need for aggressive tightening.

Federal Reserve Director Christopher Waller said he supports raising the benchmark interest rate in December, and also left open the possibility of a 'big step' of raising it by 50bp (1bp = 0.01% point) if inflation continues.

“Increasing just 25 basis points could jeopardize our credibility,” Waller said.

“Given the current outlook, it remains clear that the Federal Open Market Committee (FOMC) will need to enact at least two 25 basis point hikes,” said Rory Logan, president of the Federal Reserve Bank of Dallas. “It may be possible for the FOMC to move faster this winter than it did this fall.”

According to FedWatch of the Chicago Mercantile Exchange (CME), the interest rate futures market sees a 100% chance that the Federal Reserve will raise the benchmark interest rate in December.

Among them, the possibility of a 25bp increase was reflected at 88.5%, and the possibility of a 50bp increase was reflected at 11.5%.

“As price data continues to be strong, the Fed could push for a more aggressive tightening cycle,” said Lindsey Rosner of Goldman Sachs. “A rate hike in December is our firm base scenario.”

Rick Reeder of BlackRock also explained, “A rate hike in December is almost certain,” adding, “The remaining question is whether it will be a 25bp hike or a 50bp hike.”

Due to this price shock and concerns about austerity, bond interest rates soared.

The interest rate on U.S. 2-year Treasury bonds, which is sensitive to monetary policy, soared more than 17 basis points to 4.73%.

The interest rate on US 10-year Treasury bonds, the bond interest rate benchmark, rose by more than 10 basis points to 4.99%, approaching the psychological resistance level of 5% again.

The interest rate on U.S. 30-year Treasury bonds also rose, rising to 5.18%.

Nvidia's stock fell sharply for two days in a row due to the investigation into a scandal involving CEO Jensen Huang and concerns about export restrictions to China.

NVIDIA's stock price fell 5.53%, and its market capitalization once fell below the $4 trillion mark for the first time since July of last year.

Microsoft (MS) also fell 2.20% on news of its competitor's new AI Office launch, and all technology stocks, including Alphabet (-0.38%), Apple (-0.62%), and SK Hynix American Stock Depository (ADR, -3.51%), showed weakness.