After the U.S. CPI release, futures for the three major U.S. stock indexes (S&P 500, Dow, Nasdaq) plunged briefly and have turned negative.

Analyst Ira Jersey said today's CPI print was broadly above expectations, reviving the possibility of a 50bp Fed hike in December flagged by Fed Governor Waller and prompting a rapid bear‑flattening move. Jersey expects the yield curve to continue flattening until the Fed stops hiking. If the Fed does raise 50bp in December, he sees a high probability of another hike in March next year.

US October inflation topped estimates for a third straight month and Fed Governor WALLER backed a December hike, lifting the dollar index more than 0.6% on Tuesday — its largest single-day gain since September. Markets increased odds of further tightening in 2027 and began pricing a small chance of a one-off 50bp December move after already fully pricing a 25bp rise. Dallas Fed President Lorie Logan also backed at least two additional 25bp hikes. Major currencies fell against the dollar: NOK, AUD and SEK slid over 1%, while JPY dropped up to 0.6%. Market participants see further near-term upside for the dollar while the Fed maintains a hawkish stance.