New York:Global markets exhibited mixed performances on Tuesday following higher-than-expected consumer inflation figures in the US, which fueled expectations for a potential interest rate hike by the Federal Reserve next month. The anticipation surrounding the interest rates dampened risk appetite despite optimism from the tech sector.
According to Anadolu Agency – English, the US Consumer Price Index (CPI) rose by 0.4% month-on-month in October, surpassing the anticipated 0.3% increase, though it was a slowdown from September's 0.6% rise. The core CPI, excluding food and energy, also saw a 0.3% month-on-month rise, slightly above expectations.
Federal Reserve board member Christopher Waller expressed support for a rate hike before the release of the inflation figures. Fed officials have suggested that at least two additional 25-basis-point rate hikes might be necessary, although the exact pace will depend on short-term economic and financial conditions. There is an 87% probability that the Fed will increase rates by 25 basis points in December, with some expectations for a more aggressive 50-basis-point hike.
The yields on US Treasury bonds, including the 10-year, five-year, and two-year, rose on Tuesday, while the US dollar index increased by 0.2% to 102.2. Gold prices fell 2.7% to $4,031 per ounce but rebounded by 0.6% the following day.
In other developments, Brent crude oil prices saw fluctuations amid diplomatic resolutions in the Middle East. The average gas price in the US fell below $4 a gallon for the first time since July. These changes in energy prices could potentially slow inflation if sustained, though rising bond yields and a stronger dollar present short-term risks.
In the corporate sector, Nvidia faced legal challenges after allegations involving its CEO led to a 5.5% drop in share prices. Conversely, tech firm CoreWeave saw its shares rise significantly due to positive earnings, highlighting mixed responses in the tech industry.
European markets closed higher on Tuesday, except for the UK, with varying performances across different indexes. In Asia, markets showed mixed results, influenced by strong earnings from CoreWeave impacting Japanese and South Korean markets positively.