US stocks fell on Tuesday after October's inflation report came in hotter than economists expected, denting hopes that the Federal Reserve will cut interest rates soon. The S&P 500 slipped 0.4% to 7,520.93, the Dow Jones Industrial Average dropped 157.86 points to 52,231.89, and the Nasdaq Composite sank 0.7% to 25,065.87.

Inflation beats forecasts

Consumer prices rose 0.4% in October from September, slowing from 0.6% the month before but above the 0.3% rise economists had forecast. Core inflation, which strips out food and energy, held at 0.3% for the month, also above expectations of 0.2%. Higher food, housing and energy costs continued to squeeze households.

Yields jump as rate-hike bets grow

The yield on the 10-year Treasury leaped to 4.99% from 4.88% on Monday, while the two-year yield rose 18 basis points to pass 4.7%, its largest one-day gain since April 2025. Traders now see a Federal Reserve rate rise next month as all but certain, with the odds of a half-point move rising to nearly 10%. The Fed announces its next decision on 9 December. Charter Communications was the day's hot stock, rising 10.6%, while Skydance was the biggest loser, down 7.6%. Financials were the best-performing sector, up 0.5%, and information technology the worst, down 1.4%. US bond markets are closed on Wednesday for Veterans Day, although stocks will trade.