US Inflation Data Triggers Market Sell-off on November 10
- Fed rate hike expectations have increased following the inflation report.
- Global equity markets fell on November 10 as investors reassessed valuations.
- Gold and silver prices retreated amid pressure from rising Treasury yields.
- Indian equities are expected to level off following a seven-day rally.
US inflation increased by 0.4% in October, exceeding street estimates and fueling expectations for Federal Reserve interest rate hikes. Labor Department reported this figure, which was higher than the 0.3% forecast but slower than the 0.6% rise observed in September.
This inflation report presents a test for the market rebound, particularly for companies with valuations sensitive to borrowing costs.
On Monday, the Dow Jones Industrial Average advanced 2.15%, the S&P 500 rose 2.35%, and the Nasdaq Composite climbed 2.74%.
Fed rate hike expectations increase following inflation data
Before the consumer price index report, futures markets saw an 84% chance of a 25-basis-point Federal Reserve rate hike at the December 8-9 meeting. Following the inflation data and comments from Fed Governor Christopher Waller, a quarter-point increase is nearly fully priced in.
Treasury yield climbed to 4.94% and the two-year yield rose to 4.69% on Tuesday. The October employment report showed nonfarm payrolls grew by 165,000, while the unemployment rate fell to 4.1% from 4.2%. Average hourly earnings rose 0.4%, and payrolls for August and September were revised upward by 84,000.
Asian markets show mixed performance amid cautious sentiment
Asian markets are up in early trading as CoreWeave’s better-than-expected earnings eased concerns about artificial intelligence-related investments, partially offsetting pressure from a Wall Street sell-off caused by higher-than-expected U.S. inflation. Japan’s Nikkei 225 is rising, while South Korea’s Kospi is moving sideways and a broader Asian index is gaining. Nasdaq 100 futures are also higher in early Asian trade after the index fell in the previous session.
European markets were supported by lower crude oil prices on Tuesday, while Asian trading reflected a cautious assessment of U.S. monetary policy.
Indian equities face profit-taking after seven-day rally
Analysts anticipate that Indian equities will level off shortly as investors take profits following a seven-day rally.
The GIFT Nifty on the NSE IX is slightly up, indicating a subdued start for Dalal Street on Wednesday.
Gold and silver prices retreat on rising Treasury yields
The anticipation of Federal Reserve interest rate hikes exerted downward pressure on non-yielding assets, specifically gold and silver.
Spot gold traded near $4,055.30 an ounce on Tuesday, marking a decline of $84.10 or 2.03%. Spot silver traded near $51.700 on Tuesday, down $1.600 or 3.01%.
In international markets at 01:04 GMT on November 11, Comex gold rose 0.24% to $4,039.9 per ounce, and Comex silver rose 0.44% to $51.45 per ounce.
MCX gold futures for December delivery closed at ₹1,40,525 per 10 grams on November 10. MCX silver futures for December delivery fell to ₹1,82,576 per kg on November 10.
At 6:30 a.m. on November 11, 24K gold was priced at ₹1,41,190 per 10 grams, while silver was priced at ₹1,83,090 per kg. At the same time, Bullion.co.in reported 22K gold at ₹1,29,424 per 10 grams and 925 sterling silver at ₹1,69,358 per kg.
Regional prices for 22K gold per 10 grams on November 11 were ₹1,29,186 in Mumbai, ₹1,28,966 in Delhi, ₹1,29,562 in Chennai, ₹1,29,021 in Kolkata, ₹1,29,287 in Bengaluru, and ₹1,29,397 in Hyderabad.
Crude oil prices decline as geopolitical tensions ease
Crude oil prices declined on Tuesday as traders reacted to a reduced likelihood of immediate United States military escalation. Brent crude fell below $90.00 a barrel on Tuesday before recovering toward $90.50, following a Monday settlement of $92.57.
Nymex WTI crude traded near $85.30 on Tuesday, following a Monday settlement of $86.85. President Donald Trump said on Monday that further United States military strikes against Iran are currently unnecessary following appeals from regional governments.
Persistent price pressures seen in October CPI components
Core inflation has increased by 0.3% in each of the last three months, showing persistent underlying price pressures. The Bureau of Labor Statistics did not release an annual inflation rate for October because the federal government shutdown in October 2025 prevented the collection of comparable data.
The headline annual inflation rate for September was 3.7%. October consumer price index components included a 0.3% rise in shelter costs, a 0.5% increase in food prices, and a 0.7% rise in the energy index, while used vehicle prices fell 1.2%.
Upcoming economic calendar and market closures
The October producer price index is scheduled for release on Friday at 8:30 a.m. United States Treasury markets will be closed on Wednesday for Veterans Day, though equity markets will remain open.
A $42 billion United States Treasury 10-year note auction took place on Tuesday.
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