US CPI Report Tuesday: Wall Street Braces as Tech Stocks Wobble
Wall Street faces October's consumer price index on Tuesday, with tech stocks still hurting from last week's selloff. Wells Fargo and Deutsche Bank forecast modest monthly gains, but a hot reading could reinforce bets on a December Fed rate hike.
Wall Street faces its next major inflation test on Tuesday, when the US consumer price index (CPI) for October is due while technology stocks are still dealing with last week's selloff. Investors are watching whether stocks fall on a higher-than-expected CPI reading, because the number feeds directly into interest rate expectations.
The week is shorter than usual. US markets are closed Wednesday for the Veterans Day holiday.
What forecasters expect
Wells Fargo expects headline inflation to rise 0.28% month over month in October, with core inflation up 0.21%. The bank said softer core inflation would bring some relief after September's upside surprise. It would not be enough to change Wells Fargo's call for a Federal Reserve rate hike in December.
Deutsche Bank sees both headline and core CPI rising 0.20%, which would point to easing price pressures compared with September. It expects the Fed to raise rates by 25 basis points in December and again in March. Its argument: the economy and labor market remain solid while inflation is still above target.
Year-over-year comparisons will not be available. A data gap caused by last year's government shutdown rules them out.
Friday's producer price index (PPI) comes next. Investors will read it for clues on the personal consumption expenditures index, the Fed's preferred inflation gauge.
Jobs data and Fed speakers
The CPI report follows a stronger-than-expected October jobs report. Nonfarm payrolls rose by 165,000, well above forecasts of 65,000. That has reinforced expectations that the Fed may need to keep policy restrictive for longer.
Several Fed officials are scheduled to speak, among them Austan Goolsbee, Tom Barkin, Jeffrey Schmid, Lorie Logan and Mary Daly.
Tech and AI in focus
Nvidia Corp (NASDAQ:NVDA) stays in the spotlight. Its shares came under pressure amid reports about CEO Jensen Huang and a board investigation into his relationship with a woman accused of being a Chinese spy.
XTB research director Kathleen Brooks said the situation raises questions about corporate governance and succession planning, given Huang's central role. She said it could also strengthen calls for greater scrutiny of the AI industry, though it does not necessarily threaten Nvidia's longer-term sales outlook.
Anthropic is expected to begin its IPO roadshow. It could file an updated registration statement with an initial price range and valuation target. Adobe's three-day MAX event starts Tuesday, and Taiwan Semiconductor Manufacturing Co (NYSE:TSM) is due to publish monthly revenue figures.
Earnings are due from KKR, Rocket Lab, Take-Two Interactive, Occidental Petroleum, CoreWeave, Cisco Systems, Applied Materials and Nebius. Existing home sales also arrive, with Wells Fargo forecasting a 5% decline in October.
