Nvidia Drops 4% as Hot Inflation Print Chills Wall Street's Rally

Stock futures wobbled and the major indexes slipped after Monday's surge, when the S&P 500, Nasdaq and Dow each closed more than 2% higher on the back of chip stocks. By mid-morning the S&P 500 was down 0.5%, the tech-heavy Nasdaq off 0.6% and the Dow down 0.2%, according to Yahoo Finance.

The morning's mood-killer was October's consumer price index from the Bureau of Labor Statistics: prices rose 0.4% last month, a slower pace than the prior month but still above what economists had penciled in. The reading backs the case for another Federal Reserve hike at its early-December meeting, after the central bank raised its key rate in September for the first time in three years. The 10-year Treasury yield jumped to 4.98%, up from 4.90% at Monday's close.

Semiconductors took the brunt. The iShares Semiconductor ETF shed 1% after gaining more than 7% Monday, with Marvell Technology and Micron each down 3% and Intel off 1%. Advanced Micro Devices and Broadcom ticked higher after opening in the red.

Nvidia, the poster child of the AI trade, fell nearly 4% — a day after tumbling more than 4%. The stock is reeling from news that the company's board is investigating CEO Jensen Huang over his relationship with a woman alleged to be a spy for China.

The rest of the Magnificent 7 mostly sagged, led by 1% declines in Microsoft and Tesla. Alphabet, Apple and Meta Platforms drifted lower, while Amazon bucked the trend with a 1% gain.

Elsewhere, WTI crude slid 2.8% to $84.45 a barrel, its weakest level since late August, as traders wait on fresh developments in the Iran war. Gold futures dropped 1.3% to $4,060 an ounce, and bitcoin traded at $73,600 — down from Monday's high near $76,000 and its lowest in almost three months.