S&P 500 Futures Muted With All Eyes on U.S. Inflation Data After Waller’s Rate Warning

December S&P 500 E-Mini futures (ESZ26) are up +0.06% this morning as investors digested hawkish remarks from Federal Reserve Governor Christopher Waller made just hours before the release of key U.S. inflation data.

Fed Governor Christopher Waller said in London on Tuesday that he is inclined to back a quarter-point interest rate hike next month, even if today’s inflation report points to easing price pressures. “But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3% or even higher — then a stronger policy move may be needed,” Waller said. “In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting.”

Shorter-dated Treasuries fell following Waller’s remarks as traders moved to fully price in a rate hike at the December FOMC meeting. The two-year T-note yield climbed five basis points to 4.62%.

In yesterday’s trading session, Wall Street’s main stock indexes closed sharply higher, boosted by another round of dip buying. The Magnificent Seven stocks, excluding Nvidia, climbed, with Tesla (TSLA) and Meta Platforms (META) rising over +5%. Also, chip and AI infrastructure stocks rallied, with Advanced Micro Devices (AMD) jumping over +13% and Applied Materials (AMAT) surging more than +11%. In addition, Ferguson Enterprises (FERG) advanced over +11% after the HVAC and plumbing distributor posted better-than-expected Q3 results and raised its full-year net sales growth guidance. On the bearish side, Nvidia (NVDA) slid more than -4% and was the top percentage loser in the Nasdaq 100 and Dow after the company’s board launched an investigation into CEO Jensen Huang following his admission of an affair with a woman described in multiple reports as a suspected Chinese spy.

“For now, the market is showing the resilience needed to turn last week’s weakness into another buying opportunity. That’s an encouraging sign,” said Mark Hackett at Nationwide.

Economic data released on Monday showed that U.S. September wholesale inventories were revised upward to +0.7% m/m from the preliminary reading of +0.6% m/m. Economists had expected the figure to remain unrevised at +0.6% m/m.

Chicago Fed President Austan Goolsbee said on Monday that inflation remains the central bank’s primary concern, while employment and economic growth appear stable. Goolsbee also noted that policymakers need to address the risk of economic overheating from the AI infrastructure buildout and a broadening of inflationary pressures. Separately, Richmond Fed President Tom Barkin said that with demand remaining robust and inflation stubbornly elevated, the appropriate course for monetary policy is relatively straightforward. Barkin added, “However, risks to the demand outlook remain easy to envision. Because of that, it is wise to move policy with care.”

U.S. rate futures are currently pricing in an 80.5% chance of a 25-basis-point rate hike and a 19.5% chance of no rate change at the next FOMC meeting in December.

Today, all eyes are on the U.S. consumer inflation report for October, which is set to be released in a couple of hours. Economists expect the consumer price index to rise +0.3% m/m in October, following a +0.6% m/m gain in September, the largest increase since April. Core CPI, which strips out the more volatile food and energy prices, is expected to rise +0.2% m/m in October, compared with +0.3% m/m in September. That would mark the smallest increase in three months. Notably, the Bureau of Labor Statistics won’t release year-over-year headline and core CPI figures because it did not publish the October 2025 CPI report due to the federal government shutdown.

The S&P 500 Index is expected to move 0.69% in either direction today, based on 85% of the value of the at-the-money straddle, according to Barchart.

Market participants will also hear from Fed Vice Chair for Supervision Michelle Bowman, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmid throughout the day.

On the earnings front, notable companies including CoreWeave (CRWV), TransDigm Group (TDG), Rigetti Computing (RGTI), and D-Wave Quantum (QBTS) are slated to release their quarterly results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.89%, down -0.14%.

The Euro Stoxx 50 Index is up +1.15% this morning, extending its advance from the previous session as a further decline in oil prices boosted sentiment. Bank and energy-intensive industrial stocks led the gains on Tuesday. Chip-related stocks also climbed, with Infineon Technologies AG (IFX.D.DX) rising over +6% after the company raised its AI sales forecast for fiscal 2027. At the same time, energy stocks lagged. Adding to the positive mood, Eurozone government bond yields fell on Tuesday as lower oil prices eased inflation concerns. Still, European Central Bank Chief Economist Philip Lane told Bloomberg on Tuesday that the central bank might need to raise interest rates in December, joining a growing number of policymakers signaling support for the bank’s third rate hike this year. “If the information set we have in December is exactly the same as the information set today, then I think it would be prudent indeed to hike,” said Lane. Investors now turn their attention to key U.S. inflation data due later in the day.

The European economic data slate is mainly empty on Tuesday.

Asian stock markets today settled in the green. China’s Shanghai Composite Index ($CHSC) closed up +0.08%, and Japan’s Nikkei 225 Stock Index ($NKY) closed up +2.87%.

China’s Shanghai Composite Index closed slightly higher today, supported by gains in the technology sector. AI supply-chain stocks advanced on Tuesday, tracking gains among their Asian peers. Non-ferrous metal stocks also edged higher. The benchmark’s advance was capped, however, as energy stocks sank following a sharp drop in oil prices. Investors also digested the country’s latest trade data. The General Administration of Customs reported on Tuesday that China’s exports surged in October, though growth slowed slightly from September’s pace. Meanwhile, imports rose much more than expected, leaving the trade surplus at $105.3 billion, its smallest since May. Despite the smaller monthly surplus, China’s cumulative trade surplus exceeded $1 trillion in the first 10 months of the year, reaching that milestone for a second straight year and a month earlier than in 2025. China’s trade surplus “underscores the resilience and competitiveness of its export sector despite a more challenging global trade environment,” said Hao Zhou at Guotai Junan International Holdings Ltd. In corporate news, shares of Jiangsu Xinde Semiconductor Technology Co. soared over +28% in their Hong Kong debut, while Suzhou Denglin Technology Co. stock fell more than -7% on its first day of trading after the chip suppliers raised a combined $301 million in their initial public offerings.

The Chinese October Trade Balance came in at $105.3 billion, weaker than expectations of $126.5 billion.

The Chinese October Exports surged +35.2% y/y, stronger than expectations of +33.5% y/y.

The Chinese October Imports jumped +41.6% y/y, stronger than expectations of +32.0% y/y.

Japan’s Nikkei 225 Stock Index closed sharply higher today, extending its rebound following Friday’s tech-driven selloff as risk sentiment improved further. Chipmakers and other AI-related stocks led the gains on Tuesday, tracking the overnight rally in their U.S. peers. Tech investor SoftBank Group popped over +13%, memory-chip maker Kioxia Holdings surged more than +9%, and chip gear maker Tokyo Electron climbed over +6%, providing a significant boost to the Nikkei. Gains in bank and machinery stocks also supported the benchmark. Meanwhile, the Bank of Japan’s summary of opinions from its October meeting, released on Tuesday, showed that some policymakers urged a faster pace of interest rate hikes as underlying inflation reached the central bank’s 2% target, reinforcing expectations for further monetary tightening. “The bank should decide on the next policy interest-rate hike when it is possible without becoming overly cautious,” one member was quoted as saying, signaling the possibility of a rate increase at the BOJ’s next meeting in December. Japanese government bond yields rose on Tuesday following hawkish signals from the BOJ’s latest summary of opinions and a poorly received 30-year bond auction. On the economic front, data showed on Tuesday that Japan’s annual household spending fell in September at the fastest pace since 2020, underscoring persistent weakness in consumption. Separate data showed that Japan recorded a current account surplus of 2.37 trillion yen in September, marking its third consecutive monthly surplus. Investor attention now turns to Japan’s October PPI data, scheduled for release on Thursday, which is expected to show that cost pressures remained elevated. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -11.24% at 36.25.

The Japanese September Household Spending fell -2.8% m/m and -6.8% y/y, weaker than expectations of +0.3% m/m and -3.1% y/y.

The Japanese September Current Account n.s.a. stood at 2.372 trillion yen, weaker than expectations of 3.354 trillion yen.

The Japanese October Economy Watchers Current Index came in at 46.1, weaker than expectations of 47.1.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks edged lower in pre-market trading, taking a breather after yesterday’s sharp gains. Advanced Micro Devices (AMD), Western Digital (WDC), and Lam Research (LRCX) each fell about -1%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - November 10th

TransDigm Group (TDG), Venture Global (VG), CoreWeave (CRWV), Scholar Rock Holding (SRRK), Mercury Systems (MRCY), Alliance Laundry Holdings (ALH), Liquidia (LQDA), Rigetti Computing (RGTI), D-Wave Quantum (QBTS), Firefly Aerospace (FLY), Wix.com (WIX), Resideo Technologies (REZI), Astronics (ATRO), Endeavour Silver (EXK), StubHub Holdings (STUB), Hemab Therapeutics Holdings (COAG), Sonos (SONO), eToro Group (ETOR), Brightstar Lottery (BRSL), Sally Beauty Holdings (SBH), Azenta (AZTA), Bitdeer Technologies Group (BTDR), Anterix (ATEX), NextNav (NN), Amprius Technologies (AMPX), Grocery Outlet Holding (GO), Lumexa Imaging Holdings (LMRI), Freenome (FRNM), BrightView Holdings (BV), Elemental Royalty (ELE), Ambiq Micro (AMBQ), Orion180 Insurance Group (OIG), Sky Harbour Group (SKYH), Evolv Technologies Holdings (EVLV), Lightwave Logic (LWLG), Horizon Quantum Holdings (HQ), Lithium Argentina AG (LAR), Angel Studios (ANGX), Kura Oncology (KURA), Janus International Group (JBI), The Elmet Group Co. (ELMT), ITG, Inc. (ITG), Energy Vault Holdings (NRGV), Kopin (KOPN), Satellogic (SATL), Black Rock Coffee Bar (BRCB), Gilat Satellite Networks (GILT), Hyliion Holdings (HYLN), LightPath Technologies (LPTH), Capricor Therapeutics (CAPR), American Integrity Insurance Group (AII), MasterCraft Boat Holdings (MCFT), 908 Devices (MASS), Factorial Energy (FAC), Fossil Group (FOSL), Clearfield (CLFD), Carlsmed (CARL), Suja Life (SUJA), Spire Global (SPIR), WhiteFiber (WYFI), Gevo, Inc. (GEVO), Terrestrial Energy (IMSR), Gladstone Land (LAND), Aviat Networks (AVNW), Inovio Pharmaceuticals (INO), Chicago Atlantic Real Estate Finance (REFI), Electromed (ELMD), RideNow Group (RDNW), TriSalus Life Sciences (TLSI), B&G Foods (BGS), Protalix BioTherapeutics (PLX).

On the date of publication, Oleksandr Pylypenko did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.