US September CPI exceeded market expectations, affecting interest rates, the dollar and equities. A rise in long-term US yields contributed to a broader stock-market sell-off. Reports related to CoreWeave prompted selling in AI- and semiconductor-related stocks, while attention is turning to major corporate earnings and executive comments for clues on the outlook.
US CPI for September, released on 14 October, exceeded expectations, strengthening expectations for an October rate hike and briefly pushing the US 10-year Treasury yield to around 5.32%. The US dollar strengthened against major currencies, while major stock indexes fell. Fed funds futures are pricing in a rate hike of roughly 25 basis points this year and about 2 rate hikes next year.
Following reports on CoreWeave, selling spread across AI- and semiconductor-related stocks, increasing uncertainty over corporate funding. Some observers said the FT report concerned an individual company and did not dispute the growth prospects of the AI and semiconductor industries.