Tonight’s CPI report is the last one before the December FOMC meeting.
The schedule is right there: the Fed announces its decision on December 9, and November’s CPI won’t be released until December 10, a day after the meeting. So tonight’s 0.4% headline figure and 0.3% core figure will basically be the latest inflation data the Fed has in hand when it meets. There’s also a PPI report on Friday, but it carries much less weight.
The market reaction was immediate.
The 10-year Treasury yield touched 4.99% intraday, just one basis point shy of 5%. Around 11 a.m. Eastern, the Nasdaq was down 0.76%, the S&P 500 was down 0.63%, and the VIX had climbed back above 20. To be honest, those losses aren’t that big. The S&P 500 had just posted its best day since April on Monday, so a bit of a pullback is perfectly normal.
Nvidia is still the most glaring one.
It fell another 4.8% today, hovering around $170. It was already down 4.27% on Monday, so that’s nearly 9% over two days, and it’s now in the red for the year. WTF, the AI leader, falling all the way while the AI supply chain has rallied across the board for two days.
I checked the Philly semiconductor index: it’s only down 0.54% today, and Applied Materials is still up. In other words, the market isn’t dumping semiconductors—it’s singling out Nvidia. The board’s independent investigation into Jensen Huang still hasn’t reached a conclusion, and I think that discount will be hard to shake. Investors would rather buy hardware with higher beta and a cleaner story. On Monday, Nvidia was the only one of the Philly index’s 30 constituents to close in the red, and it’s leading the declines again today. This is no coincidence anymore.
Now, crypto.
When the BTC figures came out, it plunged below $73,500, then bounced back to $74,000. At the time, I thought the low might hold. Now it’s at $73,200, and the low has been breached. MSTR is down 3.7% today, just above $120.
The logic is pretty simple: with the 10-year Treasury yield heading toward 5%, risk-free returns are right there, so assets that don’t generate income need to offer a stronger case. On the ETF side, IBIT has seen outflows for seven straight days, and there’s clearly no sign of allocation flows returning.
Over the next three weeks, the things most likely to change the trend are Friday’s PPI and Nvidia’s earnings on November 17. If earnings are good enough to put the investigation behind it, risk appetite for both the AI supply chain and BTC might recover a bit. If they’re not good enough, I’m not sure I want to watch the market the day the 10-year yield breaks above 5%.
$NVDA $BTC