US Stocks Lower on Inflation Update    11/10 09:26

   U.S. stocks are drifting lower Tuesday after a report showed inflation was 
worse across the country last month than economists expected.

   NEW YORK (AP) -- U.S. stocks are drifting lower Tuesday after a report 
showed inflation was worse across the country last month than economists 
expected.

   The S&P 500 fell 0.2% and gave back some of its big rally from the day 
before. The Dow Jones Industrial Average was down 212 points, or 0.4%, as of 10 
a.m. Eastern time, and the Nasdaq composite was 0.1% lower.

   Pressure from the bond market undercut stocks following the discouraging 
report on inflation. People had to pay prices for groceries, electricity and 
other costs of living that were even higher last month than economists 
expected. That could push the Federal Reserve to hike its main interest rate at 
its next meeting in December and beyond.

   Higher interest rates can help rein in inflation, but they do so by making 
it more expensive for everyone to borrow money and by slowing the overall 
economy. Higher rates also make investors less willing to pay high prices for 
stocks and other investments.

   One Fed official even hinted the central bank may increase the federal funds 
rate by double the typical amount next month because of how high inflation has 
remained for years.

   Speaking in London before the inflation report was released, Fed Gov. 
Christopher Waller said "a stronger policy move may be needed" if the report 
showed an important underlying measure of inflation rose by 0.3% from September.

   In that case, he said the Fed should consider hiking the federal funds rate 
by half a percentage point rather than the typical quarter point. Moving by 
only the usual amount could "put our credibility at risk, a risk I am not eager 
to take."

   Shortly afterward, Tuesday's inflation report showed that the underlying 
measure of inflation Waller was worried about was exactly 0.3%, the threshold 
he had set.

   That sent yields jumping in the bond market as traders upped their forecasts 
for coming hikes to rates by the Fed.

   The yield on the 10-year Treasury jumped to 4.98% from 4.88% late Monday. 
That's a notable move for the bond market, and the yield helps set where rates 
are for mortgages and other loans going to U.S. households and businesses.

   The 10-year Treasury yield had been dropping since early October, when it 
topped 5.30% as worries spiked about high inflation, higher interest rates, the 
U.S. government's big debt and other concerns.

   Tuesday's jump in yields came even though oil prices fell again. The price 
for a barrel of Brent crude oil sank 2.4% to $90.32. President Donald Trump 
said late Monday that the war in Iran, which sent oil prices much higher, 
"militarily is effectively over."

   Brent's price has been falling from more than $112 at the start of the month 
amid uncertainty about what will happen with the war with Iran.

   Jumps in Treasury yields push downward on prices for all kinds of stocks, 
and they typically most affect those seen as the most expensive. That's keeping 
the focus on stocks tied to the artificial-intelligence boom, which soared to 
records in the frenzy around AI despite criticisms that they were in a bubble.

   More recently, they've come under pressure on worries that Democratic 
victories in statehouses across the country last week could mean restrictions 
on further construction of AI data centers.

   Nvidia fell 3.1% and was the heaviest weight on the S&P 500. The chip 
company has also been dealing with issues unrelated to the rest of the AI 
industry after its CEO, Jensen Huang, admitted to a relationship with a woman 
who, according to The New York Times, U.S. intelligence determined was 
gathering information for China.

   Other stocks in the AI industry were mixed. GE Vernova, which is helping to 
power AI data centers, dropped 5.4%.

   But Advanced Micro Devices rallied 5.5%. CoreWeave, a company that rents out 
access to AI chips to customers over the cloud, also held up better. It added 
3.6%.

   In stock markets abroad, indexes rose across much of Europe and Asia.

   South Korea's Kospi jumped 4.4% for one of the world's biggest gains on 
strength for its two tech giants that have benefited from the AI boom, Samsung 
Electronics and SK Hynix.