On November 10, the U.S. released its Consumer Price Index (CPI) for October. Markets had expected inflation to continue cooling, but instead received a less-than-ideal report.
U.S. CPI rose 0.4% month over month in October, above the market forecast of 0.3%. Core CPI rose 0.3%, also exceeding expectations of 0.2%.
The figures may seem just 0.1 percentage point higher than expected, but the impact on financial markets is significant.
U.S. Treasury yields rose rapidly, with the 10-year yield nearing 5%. The dollar strengthened, and markets began reassessing their expectations for the Fed’s December policy decision.
Based on interest rate futures pricing in the morning of November 11, the market’s expectations of a 25-basis-point rate hike in December were close to 90%, with some probability also being assigned to a larger hike.
At the same time, U.S. tech stocks came under pressure, and Bitcoin and Ethereum continued to weaken.
This made me realize something: when U.S. inflation becomes the market’s focus again, the impact may extend beyond U.S. stocks to the pricing dynamics of global risk assets as a whole.
I. CPI was only 0.1 percentage point higher, so why did the market react so strongly?
First, let’s understand one concept: CPI is not just a measure of the cost of living; it is also an important reference point for the Federal Reserve in assessing inflationary pressure.
The core CPI figure was the one that really deserved attention in this report.
Core CPI excludes food and energy prices, helping the market assess more persistent price pressures.
U.S. core CPI rose 0.3% month over month in October, remaining at this level for the third consecutive month.
This means that although some energy prices have fallen, pressures in services, housing-related costs, and other essential consumer categories have not eased significantly as the market expected.
For the Federal Reserve, the most difficult situation is when inflation is not falling fast enough, but economic activity is not clearly weakening either.
Easing monetary policy too early could reignite inflation; maintaining tight policy or even raising rates could increase business borrowing costs and weigh on economic activity.
That is why the market quickly revised its expectations for December policy after this CPI report.
The Federal Reserve will hold its next policy meeting on December 8–9.
The market’s baseline expectation has now shifted to a 25-basis-point rate hike, but it is important to remember that interest rate futures reflect market pricing, not a decision already made by the Federal Reserve.
Moreover, if inflation remains elevated in future reports, expectations of a larger rate hike could also change.
II. What really affects asset prices is Treasury yields
When people see CPI rise, their first thought is often inflation.
But from an investment perspective, I think changes in Treasury yields deserve closer attention.
On November 10, the 10-year U.S. Treasury yield rose to about 4.99%, approaching 5%. The 2-year Treasury yield, which is more sensitive to the Federal Reserve’s near-term policy, also rose to about 4.73%.
Why are these two figures so important?
Because Treasury yields can be viewed as an important pricing benchmark for global financial markets.
When U.S. Treasury yields rise, the expected returns on dollar-denominated fixed-income assets increase, so other risk assets have to reassert their investment appeal.
This is especially true of technology companies whose valuations depend on earnings growth many years into the future.
Here’s a simple example:
An AI company may not yet be generating profits on a large scale, but the market may still assign it a high valuation based on its growth potential over the next five or even ten years.
If the discount rate required by the market rises, the present value of those future profits falls.
That’s why changes in interest rates affect tech stock valuations.
After the latest U.S. CPI report, the Dow fell about 0.30%, the S&P 500 fell about 0.38%, and the Nasdaq fell about 0.74%.
The market is concerned not only about the current inflation figures, but also that high interest rates may persist for longer.
III. Why has the AI sector also been affected?
For some time, AI has been one of the most closely watched investment themes in the U.S. stock market.
Nvidia, AMD, Microsoft, and many data center-related companies have all attracted market attention as AI infrastructure expands.
But the AI industry has one defining feature: it requires substantial upfront capital investment.
Building data centers requires purchasing GPUs, servers, and networking equipment, as well as investing heavily in power and cooling.
If interest rates remain high for a prolonged period, financing costs will rise.
For companies that have already invested heavily, the returns on future investments will face closer scrutiny.
After this CPI report, tech stocks pulled back, and the market began reassessing the payback period for AI capital expenditures.
However, it is important to distinguish macroeconomic factors from company-specific factors.
For example, Nvidia has recently also been affected by separate developments, such as a corporate governance investigation. Not every stock decline can be attributed to CPI.
I think the focus of competition in the AI sector may gradually shift from who invests the most to who can turn AI investments into revenue and cash flow more quickly.
For ordinary investors researching AI stocks, in addition to revenue growth, it is worth keeping an eye on:
* Whether capital expenditures continue to expand;
* Whether profit margins in the data center business are improving;
* Whether customers continue to increase their purchases;
* Whether free cash flow can cover some of the investment in expansion.
These indicators become even more important in a high-interest-rate environment.
IV. Why are BTC and ETH also under pressure alongside U.S. stocks?
One notable feature of this market move was the simultaneous weakness in traditional tech stocks and digital assets.
On November 10, after the U.S. CPI report was released, Bitcoin fell below the $74,000 level, while Ethereum posted a steeper decline.
Late in the U.S. stock market session that day, BTC traded briefly around $74,000, while ETH pulled back to around $2,060.
Why are crypto markets also affected by U.S. inflation data?
There are three main reasons.
First, expectations for dollar liquidity change.
When the market believes the Federal Reserve may maintain tighter monetary policy, investors typically reassess the cost of holding highly volatile assets.
BTC and ETH do not generate fixed interest income in the traditional sense, so when dollar interest rates rise, some investors may reduce their risk exposure.
Second, risk appetite declines.
When U.S. tech stocks fall, investors often reassess their entire portfolio of risk assets.
Assets that had previously risen sharply or were held with significant leverage may face more pronounced position adjustments.
Third, derivatives markets can amplify volatility.
If the market has accumulated a large number of leveraged long positions, a price decline may trigger forced liquidations.
The additional selling pressure from liquidations may push prices down further.
So the weakness in BTC and ETH this time is not just an issue specific to digital assets; it is also linked to expectations for dollar interest rates, market risk appetite, and leverage in the market.
However, it is important to emphasize that BTC and the Nasdaq do not maintain a fixed correlation at all times. At different stages, ETF fund flows, on-chain supply and demand, and developments specific to digital assets can also have an independent impact.
V. In the face of changing interest rates, ordinary investors should pay more attention to the flexibility of their funds
I think one important reminder for ordinary investors from this CPI event is:
Don’t base all your financial plans on the assumption that a single market will keep rising.
For example, someone who usually focuses mainly on digital assets may hold a certain amount of U in their account.
If they also follow U.S. tech companies, they need to consider two questions:
On the one hand, do they need to adjust their financial arrangements when digital asset markets are volatile?
On the other hand, if they identify U.S. stocks with valuations worth researching, do they have the funds to participate in traditional stock markets?
This brings up a practical need: moving between different asset classes.
BiyaPay offers instant U-to-USD conversions and also allows users to use U to trade actual U.S. and Hong Kong-listed stocks.
For example, users who usually hold U and are also researching Nvidia, Microsoft, or other technology companies can check the exchange rate for converting U to USD based on their needs, and then review the stocks and trading conditions supported by the platform.
BiyaPay charges zero commission on U.S. stock trades and supports the corresponding dividend entitlements.
This means users do not have to express their views on the market only through digital assets such as BTC and ETH; they can also learn about ways to participate in traditional stock markets.
Of course, a higher-than-expected CPI reading does not mean U.S. stocks will necessarily fall or that digital assets will necessarily continue to weaken.
What really matters is allocating positions based on your intended use of funds, risk tolerance, and investment horizon—not immediately moving all your money into another market just because one market has fallen.
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The platform also offers commodity futures and flexible-term wealth management services. The advertised maximum annualized rate for flexible-term wealth management is 10.22%; actual returns, redemption terms, and product risks are subject to the applicable terms.
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I think BiyaPay is best understood in the context of multi-asset fund management: from U conversions and global stock trading to digital asset trading and cross-border money transfers, users can explore the features that suit their different needs.
VI. What matters more than watching BTC prices next is tracking these four sets of data
After this CPI report, I think the market needs to establish a new order for what to monitor.
1. 10-year U.S. Treasury yield
If it stays around 5% for an extended period, that signals continued pressure from long-term interest rates, which may keep weighing on growth stock valuations.
2. Expectations for the Federal Reserve’s December interest rate decision
Pay close attention to changes in the market’s probability estimates for 25- and 50-basis-point rate hikes, rather than looking only at whether rates will rise.
3. Upcoming PCE inflation data
After the CPI report, the market will also be watching PCE, particularly core PCE. It is one of the inflation indicators the Federal Reserve focuses on and can help determine whether price pressures are truly easing.
4. Fund flows into and out of BTC and U.S. stock ETFs
If funds are flowing out of both U.S. stocks and BTC, it is important to watch whether the trend persists. A return of inflows may indicate that risk appetite is gradually recovering.
I prefer to look at these indicators together rather than make a judgment based solely on price movements on any one day.
Finally: what the market really fears is not one higher-than-expected CPI report, but the possibility that high interest rates will last longer
The latest U.S. October CPI data reminded the market that inflation has not been fully brought under control.
U.S. Treasury yields approached 5%, expectations for a December Federal Reserve rate hike increased, AI tech stocks came under pressure, and BTC and ETH were affected by a decline in risk appetite.
Behind these developments is the same concern: the cost of capital for global investors may be higher over the coming period than previously expected.
Rather than chasing market moves every day, investors would be better off first understanding what assets they hold, what funds they will need in the future, and how to allocate funds sensibly across different markets.
Markets can change repeatedly, but a clear approach to managing your money can help you stay in control under different market conditions.
This article is for informational purposes only. Please conduct your own analysis and make your own decisions. It is not investment advice. Avoid unnecessary losses!