Rekt Mkts: Hot CPI puts a 50bp hike on the table

Yday was a proper tug of war. The October CPI print came in hot (0.4% headline, core 0.3% for the third month running against 0.2% expected) and a few hours before the number Waller had already said a core print of 0.3% or more would make him consider a 50bp hike in December. So the bond market got absolutely smoked, the 2Y had its biggest one-day jump since the April 2025 tariff tantrum and the 10Y traded through 5% before closing just under it. Stocks sold off into the close with Nvidia down another 5.5%, which wipes another chunk off a stock that's now around 30% below its high. Then CoreWeave reported after the bell, beat on revenue, raised full-year guidance and the whole AI complex exhaled. The stock is up around 13-15% pre-mkt, Nebius is up double digits with it and Nasdaq-100 futures are up 1.5%. Given CoreWeave was the name everyone used as the poster child for the AI debt bubble (its CDS blew past distress levels last month), a clean quarter from it does more for sentiment than almost any other print could have. Whether it does enough to offset a Fed that's now openly talking about jumbo hikes is the question for today.

The CPI itself was 0.4% on the headline after 0.6% in September, with core at 0.3% again and no YoY figure because of last year's shutdown gap. The market read is simple: a December hike is now fully priced, there's roughly a 10% chance it's 50bp rather than 25bp, and futures have three quarter-point moves priced by mid 2027 where there were two before the data. Logan backed at least two more hikes possibly at a quicker pace and Goolsbee called it a real inflation issue, so the hawks are not shy right now. Yields closed yday with the 2Y around 4.73% (up roughly 18bps), the 10Y around 4.99% (up roughly 12-13bps) and the 30Y around 5.35%. The US bond market is shut today for Veterans Day, so there's no cash Treasury trade to lean on while equities are open, which could make the stock tape a bit odd. WTI futures are around $86.79, up 0.9%, after Brent dipped below $90 yday for the first time since August on Trump saying the Iran conflict could end fairly soon. Gold futures are around $4,056, up 0.6%. Given CPI blew up the front end and CoreWeave is reflating tech at the same time, I feel like today could be a whippy one, with Friday's PPI as the next thing that can move the rate story.

S&P 500 and Nasdaq-100 futures are up +0.6% and +1.5% respectively, reversing yday's cash declines of 0.4% and 0.6%. CoreWeave did 168% revenue growth to $3.7bn in Q3, raised 2026 revenue guidance to $13-13.3bn with adjusted operating income of $1.275-1.375bn against roughly $1.07bn expected, and said around $9bn of customer prepayments and deposits are helping fund the buildout. The stock is up around 13-15% pre-mkt, Nebius around 11% and Iren around 8%. That's the financing question getting a decent answer for at least one quarter, which is what the market needed after the CDS scare. Nvidia is the exception again. It closed down 5.5% yday after 4% on Monday, so around $430bn has come off the market cap since the Huang story broke. The board has now hired Wachtell Lipton and former SDNY prosecutor Joon Kim to run the investigation, Trump has said the FBI is looking into it, and there's a shareholder class action filed in San Jose. None of that resolves the actual risk, which is a founder-led company with no chair and no obvious successor having its CEO investigated less than a week before it reports on 17 November. The AI trade can bounce on CoreWeave without Nvidia joining in, and that's roughly what pre-mkt looks like. Memory had a quiet US session by recent standards (Micron down 1.1%, Sandisk 3%) but Asia caught the CoreWeave bid: SK Hynix finished up 5.4%, Samsung 3.6% and Kioxia 5.5%, with the Kospi up 2.6%. That's the first proper follow-through in Korean memory since the selloff started, altho it's one session. Nebius reports tomorrow morning, then Cisco and Applied Materials tomorrow evening, so the AI capex picture gets two more data points before the week is out.

BTC is down around 1.1% over 24H, ETH 2.4%, SOL 2.7% and HYPE 3.7%. Crypto hasn't joined the CoreWeave relief at all so far and is trading more like the bond market than the Nasdaq, which makes sense when the front end is repricing for more hikes. ETH is down around 1.4% against BTC over the same period, so it's still bleeding against the majors as well as in dollars. US spot BTC ETFs lost $95m yday and ETH funds lost $1.3m, which is as close to flat as the ETH complex has been in weeks. That's a fourth consecutive session of outflows for both, taking Thursday through Tuesday to $1.138bn out of BTC and $379.1m out of ETH. The pace has slowed a lot from Monday's $201m and $184.6m, but nobody is buying the dip through the ETFs either. The theme worth paying attention to on the supply side is the miners. Riot has sold 20,264 BTC this year to fund its data centre build, MARA sold 13,597 BTC for around $1.1bn after the quarter ended and says it will keep selling for AI infrastructure and note obligations, and Hyperscale Data just sold the last of its stack for a Michigan site. The business logic is obvious coz a megawatt leased to an AI tenant earns roughly double what it does mining, but it means some of the most consistent natural holders of BTC have turned into consistent natural sellers, and that selling is tied to their capex calendar rather than the price. Hard to see that pressure easing while AI power deals are still getting signed. ZEC is down around 14.6% over 24H and its BTC ratio is down around 13.7%, so this is nothing to do with the majors. It dropped from just under $1,200 to below $1,000 in a couple of hours yday, with reports pointing to a wave of leveraged long liquidations, and it's now down around 21% over seven days, which is a long way behind the wider market. Grayscale picked the same day to launch a Zcash education campaign and commit $1m to the ecosystem, which tells you something about where institutional interest sits but clearly did nothing for the chart. After two briefs of small pullbacks this is a proper break lower, and the relative strength story that carried it through the election week is gone for now. HYPE got its Upbit and Bithumb won listings yday and still finished down, which is a decent reminder that Korean listings don't do much for large caps when the whole market is being sold. Good luck today.