October CPI hotter than expected: headline +0.4%, core +0.3%, sealing December rate hike (Nov 10)
What happened
The Bureau of Labor Statistics reported on Tuesday, November 10 at 8:30 a.m. ET that the consumer price index rose 0.4% month-on-month in October, above the 0.3% consensus forecast, after a 0.6% jump in September. Core CPI, excluding food and energy, rose 0.3% — above the 0.2% forecast and the third consecutive monthly 0.3% reading. Shelter rose 0.3% and accounted for more than 30% of the monthly increase; food rose 0.5% and energy 0.7%. No official 12-month inflation rate was published for headline or core, because BLS never collected October 2025 prices during last year's government shutdown. S&P 500 futures slid after the release, reversing some of Monday's 2.35% rally, and markets moved to price a 99% probability of a 25-basis-point Fed hike on December 9, with odds of a further hike by the March 17 meeting jumping to 67% from 50% on Monday.
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- S&P 500 and Nasdaq 100 (futures slid after the print; rate-sensitive growth and AI stocks most exposed to higher-for-longer pricing)
- Treasury-sensitive sectors as the 2-year yield climbed to around 4.61%; banks and financials (benefit from higher rates and a steeper curve); homebuilders and other rate-sensitive cyclicals (headwind from higher yields).