US stocks: Dow Jones falls 200 points as hot inflation revives rate-hike fears; Nvidia sinks

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The Dow Jones Industrial Average was down 257.10 points, or 0.49%, at 52,132.65. The S&P 500 fell 45.94 points, or 0.61%, to 7,504.00, while the Nasdaq Composite declined 188 points, or 0.74%, to 25,065.14.

Fed Governor Christopher Waller said earlier that the central bank should raise rates by at least 25 basis points next month, even if inflation moderated in October. He added that policymakers should consider a half-percentage-point increase if price pressures accelerated.

“There are some fears that underlying price pressures are starting to build again. It creates some concern,” James McCann, senior economist at Edward Jones told Reuters. “Markets had been pricing out some of the Fed tightening in recent weeks. Now it’s probably being forced to contemplate a bit more tightening.”

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Nine of the 11 major S&P 500 sectors traded lower. Among rate-sensitive sectors, financials gained 0.15%, while utilities and real estate were among the biggest laggards.

Nvidia, Anthropic test AI sentiment

The Information reported allegations involving Huang’s relationship with a Chinese businesswoman and the shipment of at least $7.5 billion worth of Nvidia chips through Chinese companies. Given Nvidia’s central role in the artificial intelligence boom, questions about Huang’s leadership and future at the company are particularly important to investors.

Other chipmakers were subdued. The Philadelphia Semiconductor Index fell 0.9% after two consecutive sessions of gains, reflecting increased volatility in the AI trade.

Investors also turned their attention to Anthropic’s expected public listing later this month. The AI company said its initial public offering could raise as much as $64.4 billion and give it a fully diluted valuation of up to $1.4 trillion.

Anthropic’s listing could intensify competition among major AI companies for investor capital.

Neocloud firm CoreWeave is scheduled to report quarterly results after Tuesday’s market close. Concerns about the sustainability of the AI boom and the company’s debt burden have weighed on its shares recently.

CoreWeave rose 0.8%, while peer Nebius fell 1%.

Skydance shares tumbled 9% after the media company announced cost-cutting measures and warned that the underperformance of Warner Bros’ film slate could reduce fourth-quarter profit by as much as $200 million.

Lower oil prices offered some relief, with Brent crude futures falling below $90 a barrel for the first time since August. Declining stocks outnumbered advancers by 4.01 to 1 on the New York Stock Exchange and by 2.63 to 1 on the Nasdaq.

The S&P 500 recorded four new 52-week highs and three new lows, while the Nasdaq Composite posted 23 new highs and 84 new lows.