US equities declined on Tuesday as stronger-than-expected inflation pressured both stocks and bonds, amid hawkish commentary from Federal Reserve officials and heightened investor focus on the forthcoming Anthropic IPO. The S&P 500 fell 0.5%, the Dow Jones Industrial Average dropped about 200 points, and the Nasdaq Composite lost 1%.
Both headline and core US CPI for October came in above forecasts, bolstering expectations of a Fed rate hike next month and increasing market bets on multiple additional increases next year.
At the same time, Anthropic is expected to begin trading as early as next week, aiming to raise up to $90 billion at a diluted valuation of roughly $1.4 trillion. The deal comes amid robust demand for AI-related services, though mounting concerns over elevated capital expenditures are prompting questions about the durability of the sector’s current investment surge.
Chipmakers were broadly weaker: Nvidia slid nearly 6%, extending losses from the previous session, while Micron fell almost 3%. Major cloud providers also retreated, with Microsoft and Oracle each declining more than 2%.