- US stocks fell ahead of a key inflation report due to disappointing earnings and renewed selling in cryptocurrencies. For the first time in four days, the dollar rose.
- The S&P 500 ended a three-day rally, with all 11 major industry groups closing in the red. The tech-heavy Nasdaq 100 fell the most among benchmarks, falling 2.4%. Walt Disney and News Corporation both fell after reporting earnings that fell short of expectations, while Bitcoin fell below $17,000 for the first time since 2020 amid a broader selloff in cryptocurrencies.
- Following the failure of the Republican Party to sweep the midterm elections, attention has shifted to the closely watched inflation report due Thursday for clues on the path of Federal Reserve policy tightening.
- Inflation in the United States likely moderated slightly in October, with both the consumer price index and the core measure, which excludes food and energy, seen cooling on an annual basis. However, with overall annual inflation exceeding forecasts in six of the previous seven months, another surprise on the upside could dash hopes of a Fed downshift after four jumbo rate hikes.
- On the election front, investors were anticipating a Republican resurgence in Congress, with the GOP taking control of both the House of Representatives and the Senate. However, US voters delivered a mixed verdict, with Republicans gaining control of the House by narrower margins than expected and the Senate race remains wide open.
