Wall Street's main indices retreated on Tuesday, pausing a two-day rebound in tech shares, after a hotter-than-expected October inflation reading reinforced fears that the Federal Reserve could keep interest rates higher for longer. Earlier in the day, Fed Governor Christopher Waller said the central bank should raise interest rates by at least 25 basis points next month even if inflation cooled in October.
If price pressures accelerated, policymakers should consider a half-percentage-point increase, he said. Traders are pricing in an almost 99 per cent chance of a hike in December, according to the CME FedWatch tool. “There are some fears that underlying price pressures are starting to build again.

It creates some concern,” said James McCann, senior economist at Edward Jones. “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.” At 09:47 a.m. ET, the Dow Jones Industrial Average fell 257.10 points, or 0.49 per cent, the S&P 500 lost 45.94 points, or 0.61 per cent, and the Nasdaq Composite lost 0.74 per cent.
Among rate-sensitive sectors, financials rose 0.15 per cent, while utilities and real estate were among the laggards. Shares of Nvidia, the second-most valuable company in the world, slipped 4.4 per cent. Jensen Huang’s affair with Chinese businesswoman Alice Huang, alleged to be a spy for Beijing, facilitated the shipment of at least $7.5 billion worth of the company’s chips through Chinese firms, The Information reported.

Brent crude futures fell over 3.2 per cent, dipping below the $90-a-barrel mark for the first time since late August, at $89.65 a barrel by 7.04 pm IST as investors pinned their hopes on possible peace talks between the US and Iran. US West Texas Intermediate futures fell $2.33, or 2.68 per cent, to $84.52.
The pan-European STOXX 600 was within 1 per cent of its all-time high as lower oil prices helped ease some of the inflation concerns that have been on investors’ radar since the US-Israeli war with Iran erupted at the end of February. South Korea’s KOSPI rose 4.4 per cent, while Japan's Nikkei gained 2.9 per cent.

MSCI’s broadest index of Asia-Pacific shares pushed 2 per cent higher, moving away from the seven-month low it hit last week. Earnings reports due this week from tech companies will be another test for markets as investors fret about the cost of the AI buildout and its profitability.