As of 11:41 AM ET, the Nasdaq Composite (NASDAQINDEX:^IXIC) is down 1.09% to 24,987, the S&P 500 (SNPINDEX:^GSPC) has fallen 0.79% to 7,490, and the Dow Jones Industrial Average (DJINDICES:^DJI) is trading 0.70% lower at 52,039 as persistent inflation data weighs on sentiment.
Gold is trading down 2.82% to $4,023.75, while the 10-Year Treasury yield rose 0.12% to 5.02%. Energy stocks were the only real gainers this morning as oil prices fell on hopes that the conflict in Iran may come to an end. Basic materials saw the biggest drop, followed by tech stocks.
Today's biggest moves
Sanmina shares are up almost 4% on robust fiscal 2027 guidance. The stock surged in premarket trading before retreating this morning. Sally Beauty also jumped following a fourth-quarter earnings beat. Conversely, Rocket Lab performance is muted following mixed earnings. Nvidia remains under pressure as the fallout from the board's investigation into CEO Jensen Huang's conduct.
What this means for investors
Yesterday's optimism was short-lived as October inflation data came in hotter than expected today, fueling fears that the Federal Reserve might not only increase interest rates in December, but also hike them again in 2027. Comments from Fed officials added to investor concern, and Treasury yields climbed.
One impact of high interest rates is to make borrowing more expensive, which can eat into corporate profits, pressuring stocks, particularly growth stocks. That is particularly important right now as some AI firms have taken on significant debt to fund infrastructure. Riskier assets are also less appealing when safer investments generate solid returns.
Investors will be monitoring CoreWeave's results after the bell, when its AI spending and financing will be under scrutiny.
Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Rocket Lab. The Motley Fool has a disclosure policy.