October CPI and tech earnings test markets after Nasdaq correction

US investors head into the week of 9 November with stocks on shaky ground and the October consumer price index due on Tuesday, Reuters reported. Earnings from CoreWeave, Applied Materials and Cisco Systems are also on the calendar.

A correction after the midterms

The Nasdaq Composite closed Thursday nearly 12% below its 6 October record, past the 10% threshold that marks a correction. Reuters said Thursday's selling was driven by concerns that Democrats' wide midterm victories would slow the AI data-centre buildout. The S&P 500 technology sector fell 7.3% that day and the Philadelphia semiconductor index dropped more than 12%, both their biggest one-day falls in more than six years. Tech led a modest rebound on Friday, but the major indexes still posted weekly losses.

CPI and December hike bets

Investors expect the Federal Reserve to raise rates in December to fight inflation, Reuters said. The Fed held steady in October after hiking in September for the first time in three years. After a strong jobs report on Friday, fed funds futures implied roughly an 80% chance of a hike at the 8 to 9 December meeting, according to LSEG data, with about two more 25 basis point increases expected in total this cycle.

A hot CPI reading could add to those tightening expectations. Those probabilities are market pricing as of 6 November, not a Fed decision.

Earnings to watch

CoreWeave, the cloud company at the centre of concerns about financing the AI buildout, is the report most likely to move the tech trade, according to strategists quoted by Reuters. Its shares have been pummelled in recent weeks. This is news coverage, not investment advice.

The October CPI figures have since been published: the index rose 0.4% as core inflation held at 0.3% for a third month. In later remarks, Governor Bowman said bringing inflation down remains a priority ahead of the December meeting.