Daily Market Briefing: A third straight 0.3% core print and Waller's half-point talk pushed the 10-year back to 5%, and with bonds shut for Veterans Day, AI dip-buyers get a one-day pass

Covers: Tue 10 Nov 02:10 ET to Wed 11 Nov 05:00 ET

Market snapshot

Market	Last	Change	Type
S&P 500	7,520.93	−0.38%	Tue close
Nasdaq Composite	25,065.87	−0.74%	Tue close
S&P 500 futures	n/a	+0.6% to +0.7%	Wed futures, ~01:20–04:30 ET
Nasdaq 100 futures	n/a	+1.4% to +1.5%	Wed futures, ~01:20–04:30 ET
Stoxx 600	658.32	+0.27%	Tue close
Nikkei 225	60,987.90	+0.87%	Wed close
KOSPI	5,274.98	+0.68%	Wed close
Hang Seng	~24,350	−0.7% to −0.8%	Wed intraday
US 2-yr yield	4.74%	+18 bp	Tue close; cash market shut Wed
US 10-yr yield	4.99%	+13 bp	Tue close; briefly above 5%
Dollar index (DXY)	~102.3	+0.6%	Tue
USD/JPY	~158.7–159.0	+0.6%	Wed Asia
Brent	~$92.2–92.5	+0.8%	Wed Asia
Gold	~$4,030	−2.5% to −2.8%	Tue; flat in Asia Wed
Bitcoin	~$73,400–73,900	−1.7%	Tue/Wed

A Nasdaq 100 cash close and a EUR/USD level could not be confirmed and are omitted. Sources differ slightly on futures timing and on the Hang Seng level, so ranges are given.

Tuesday's hot inflation report ended Monday's oil-driven rally after one session. October CPI rose 0.4% with core at 0.3%, both a tenth above consensus, and Fed Governor Christopher Waller had said hours earlier that a core reading of 0.3% or more should put a 50 basis point hike on the table in December. The 2-year yield jumped about 18 basis points, the 10-year briefly broke 5%, gold fell almost 3% and Nvidia lost another 5.5% on its Washington troubles. Overnight, sentiment turned the other way: Nasdaq 100 futures rose about 1.5% on CoreWeave's results and on a Financial Times report that bankers may lift Anthropic's IPO valuation above $1.5 trillion. Asia was mixed, with Tokyo and Seoul higher and Hong Kong lower. The US bond market is closed today for Veterans Day while stocks trade normally, so equities will not get a fresh read from Treasuries until Thursday.

Geopolitics and trade

New reporting shows US-licensed Nvidia chips reaching China's military orbit, and Congress is moving to take export decisions away from Commerce

Reuters reported on Wednesday that Northwestern Polytechnical University, a Chinese university with deep ties to the People's Liberation Army and on the US Entity List, bought Nvidia H200 chips last month, according to procurement records Reuters reviewed. Nvidia and the Commerce Department's Bureau of Industry and Security did not respond to Reuters. The report lands days after The New York Times found that Commerce had approved Chinese firms to handle H200s even though some had empty offices and owners linked to Wise Road, a private equity firm on the Entity List. About two dozen Chinese companies have been cleared to buy or handle the chip since Trump allowed H200 sales in December 2025 in exchange for a government revenue share.

Congress is using these findings, and the scandal around Nvidia CEO Jensen Huang, to write export limits into law. Three measures already sit in the Senate's defense bill (NDAA) management package, according to the South China Morning Post and Reuters. The Chip Security Act would require location-verification on restricted AI chips to fight smuggling. The AI Overwatch Act, backed by Republican Jim Banks and Democrat Elizabeth Warren, would let Congress block advanced chip exports to US adversaries. The MATCH Act from Sen. Pete Ricketts would push allies to stop selling chipmaking tools to China. House Democratic leader Hakeem Jeffries said he will work to keep all three in the final bill. House Foreign Affairs Chair Brian Mast said the White House itself added language to the AI Overwatch Act aimed at Chinese access to US chips through overseas data centers. Punchbowl reports the administration gave technical feedback on the MATCH Act, though Trump has not endorsed any of the bills.

The real risk to Nvidia's numbers is not the licensed China business, which is tiny. Beijing has largely kept H200s out of the country through customs guidance and its push for domestic chips. The exposure sits in two other places. First, the Overwatch language on overseas data centers could tighten sales into Southeast Asia and the Middle East, where Chinese firms rent compute. Second, a location-verification mandate would add cost and engineering work to every restricted chip, not just those bound for China. The MATCH Act matters more for ASML, Tokyo Electron and the US toolmakers Applied Materials, Lam Research and KLA than for Nvidia, because it would extend US-style limits to allied equipment sales.

Our view: The odds that some chip language survives into the final NDAA have risen sharply this week. Last year a similar measure, the GAIN AI Act, passed the Senate and was stripped out after lobbying by the White House and Nvidia. This time the White House is drafting language rather than opposing it, Democrats take both chambers in January, and the Reuters and Times findings give lawmakers an easy argument that the licensing system leaks. Investors should treat a statutory chip-export regime as the base case for 2027. The most likely result is a slow increase in compliance costs and in Washington's say over Gulf and Asian AI build-outs, not a sudden loss of revenue.

China's Foreign Ministry called the espionage allegations around Huang "unfounded," according to spokesman Guo Jiakun. Beijing has every reason to keep this out of the Trump–Xi meeting in Shenzhen next week (see China).

Oil steadies near $92 as Iran's proposal and Gulf preferences complicate Trump's "fairly soon"

Brent fell more than 1% to about $91.56 on Tuesday, near a 10-week low, after Trump said the Iran war could end "fairly soon" and called new strikes "quite unlikely," according to CNBC. It recovered about 0.8% to roughly $92.2–92.5 in Asian trading on Wednesday. Reuters, citing a senior Iranian official, reported that Tehran sent a two-day proposal through Qatari mediators asking for sanctions relief and a new shipping route through the Strait of Hormuz. Senior Iranian figure Mohsen Rezaei dismissed US talk of negotiations as "fake news."

The new detail is where the Gulf states stand. CNBC reports that Qatar, Saudi Arabia, the UAE, Bahrain and Kuwait prefer the status quo: the US naval blockade plus "Operation Iron Gate," a task force announced on Saturday to disrupt Iranian overland transit routes. That changes the read of Monday's rally. Oil priced a deal that reopens Hormuz, but the region's producers seem content to keep pressure on Iran, and shipping attacks in and near the strait continued over the weekend. Goldman Sachs raised its oil price forecasts on Sunday, citing risks to Persian Gulf output and exports.

Our view: The risk is skewed toward higher oil from here. A $92 Brent already prices a good part of a settlement, while the US, Iran and the Gulf states disagree on its terms. For growth investors, the channel that matters is inflation: Tuesday's CPI showed that the Fed is now reacting to core prices, so cheaper oil alone will not soften the December decision, but a renewed spike would make 2027 hikes more likely.

Ukraine talks restart in Abu Dhabi with low expectations; G-7 allies press Rubio on Iran

The United States, Russia and Ukraine opened two days of talks in Abu Dhabi on Tuesday, their first trilateral round in about nine months, according to Reuters and Foreign Policy. Envoys Steve Witkoff and Jared Kushner lead the US side; Vladimir Medinsky leads Russia's and Rustem Umerov Ukraine's. Day one focused on security guarantees for Kyiv, which Kushner called an "initial step." Zelensky called the discussions constructive. The core disputes are unchanged: Moscow wants Ukraine to leave the Donbas regions it still holds and rejects a ceasefire before a wider deal, while Kyiv and its European backers want a ceasefire first and refuse to give up territory. Russia struck Ukrainian energy facilities overnight before the talks, causing outages in six regions.

At the G-7 foreign ministers' meeting in Paris, Secretary of State Rubio said there is "a lot of work to be done" on Ukraine. European ministers pressed him to seek a fair settlement for Kyiv and to avoid escalation with Iran. It was Rubio's first overseas trip since the midterms.

Our view: A breakthrough is not the base case, and Ukraine's own negotiators said as much. The market-relevant outcomes are smaller: a prisoner exchange or an energy-infrastructure truce would modestly help European gas prices and industrial stocks. A ceasefire would matter far more, but no party has moved on territory.

Global Events

Unrest spreads in Indonesia and Bangladesh; the Saudi–Houthi war keeps the Red Sea closed to normal traffic

Indonesian police detained 154 people in Yogyakarta after overnight clashes at the provincial parliament on Tuesday, the most violent turn in weeks of protests over economic pressures, according to reports. Protesters threw firebombs and rocks; police used tear gas and water cannon. In Bangladesh, the Washington Post reports that three days of crude bomb attacks and vehicle arson in Dhaka and elsewhere left one dead. Police blame paid recruits tied to a banned group, as reports say ousted former prime minister Sheikh Hasina plans to return from exile next month.

Further west, the Saudi-led coalition and the Houthis remain in open conflict around the Bab al-Mandab strait. More than 500 people have been killed since a Houthi offensive began in late October, according to reports from 6 November. With Hormuz restricted by the US–Iran war and the Red Sea's southern exit contested, both of the Gulf's main shipping routes remain disrupted.

Our view: Indonesia is the one to watch for investors. It is a large emerging market with rising unrest, and further violence would weigh on the rupiah and on regional EM funds. Bangladesh matters mainly for the apparel supply chain ahead of the holiday restocking season.

Economy

Core CPI rises 0.3% for a third straight month, and the question shifts from whether the Fed hikes to by how much

Consumer prices rose 0.4% in October, above the 0.3% consensus, after 0.6% in September, the Bureau of Labor Statistics said on Tuesday. Core CPI, which excludes food and energy, rose 0.3% against a 0.2% forecast, matching September and marking its third straight 0.3% gain. Food rose 0.5% and energy 0.7%; gasoline rose only 1.0% after a 9.1% jump in September, according to HousingWire. Shelter and medical care also added to the gain. Morningstar and Yahoo Finance pointed to food and rent as the main upside surprises.

The BLS again did not publish a 12-month rate, because October 2025 prices were never collected during the shutdown. Estimates of the implied annual rate vary: Axios puts headline near 4%, while HousingWire says economists see it in the high-3% range. Annualizing the core gives about 3.7%, far from the Fed's 2% target.

The more important detail is breadth. Marketplace and analysis published on Seeking Alpha described price pressure spreading across categories rather than concentrating in energy. That undercuts the argument, popular after Monday's oil drop, that cheaper crude would soon pull inflation down. Energy is now a small part of the problem; services and food are the larger one.

Our view: This print makes the December hike close to certain and makes a second hike in early 2027 more likely than markets expected a week ago. The asymmetry we described before the release has now played out on the wrong side: the "one and done" case needed a 0.2% core. The November CPI on 10 December, released the day after the FOMC decision, will no longer shape the December move but will set the tone for January.

Waller floats 50 basis points; the 2-year jumps 18 basis points and the 10-year touches 5%

Hours before the CPI release, Fed Governor Christopher Waller said he was leaning toward a December hike and that a half-point move "should be considered" if October core CPI came in at 0.3% or higher, according to CNBC and The Hill. The data then landed exactly at his threshold. CME FedWatch shows a 25 basis point hike at the 8–9 December meeting as essentially fully priced, with the odds of 50 basis points at roughly 10% to 12.5% depending on the source (CNBC, Reuters, TheStreet). Goldman Sachs calls a December hike its "firm base case."

Treasuries sold off hard. The 2-year yield rose more than 18 basis points to 4.736%, the 10-year rose 13 basis points to 4.992% after briefly trading above 5%, and the 30-year rose to about 5.35%, according to CNBC. A $42 billion 10-year note auction was soft: dealers had to take about 10%, the most since May. The dollar index rose about 0.6% to near 102.3, gold fell 2.5% to 2.8% to roughly $4,030 an ounce, and Bitcoin slipped below $74,000 as spot ETF outflows continued, according to CNBC, Reuters and The Block.

The curve move matters for equity positioning. A bear flattening, with the 2-year up more than the 10-year, says markets now expect a longer and higher Fed path rather than just a single move. A 5% 10-year yield is the level at which long-duration growth stocks have struggled each time this year, because it lifts discount rates and offers a competitive risk-free return.

Our view: The 50 basis point talk is likely to stay a tail risk rather than the outcome; a split committee under Chair Warsh is more likely to hike 25 and signal more if needed. The bigger near-term danger for tech is the long end. With supply heavy and the 10-year auction already showing weak demand, the bond market can push yields higher without any new Fed signal. Today's Veterans Day closure only delays that test to Thursday, and Friday's PPI is the next catalyst.

US

Nvidia's problem is now a Washington problem: a Commerce warning, a resignation call and a briefing deadline today

Axios reported on Tuesday that Commerce Secretary Howard Lutnick's department received a classified national security warning about Jensen Huang's relationship with Alice Huang, the Megaspeed executive US officials have described as a suspected Chinese intelligence asset. Republican Sen. Kevin Cramer called for Huang to resign, according to Politico as cited by FXStreet. House Energy and Commerce Chair Brett Guthrie told Reuters his committee will "have to act" once the FBI investigation moves forward. Nvidia's board has opened its own review and said it has no reason to believe national security or company secrets were compromised. The allegations against Huang himself remain unproven, and he has not been charged with anything.

Today is the deadline Nvidia was given to tell three House Republican chairs, Brian Mast, John Moolenaar and Rick Crawford, whether Huang will attend a closed-door briefing on 18 November, the day after Nvidia reports earnings. The stock fell about 5.5% on Tuesday after a 4.3% drop on Monday; the two sessions erased about $430 billion of market value, according to investingLive. It was up about 3% in premarket trading on Wednesday.

Our view: The market is mostly pricing a governance discount, which can fade if Huang appears before the committees and nothing new emerges. The policy risk is longer-lived: the scandal is the political fuel for the NDAA chip provisions (see Geopolitics), and a scenario in which Huang declines the briefing would make those provisions more likely to survive. A leadership change remains a low-probability, high-impact risk for the whole AI supply chain, because Huang is central to Nvidia's relationships with hyperscalers, TSMC and governments.

China

Singles' Day sales come in flat as factory and consumer prices pull further apart

China's Singles' Day shopping festival peaked on Wednesday with sales that look flat. Data firm Syntun put cumulative sales through 31 October at just over CNY 1 trillion, broadly in line with last year's pace, according to the Associated Press. Analysts blamed weak consumer confidence tied to the long property slump and discount fatigue, as heavy promotions now run all year. Retail sales grew only 1.1% in January to September, while GDP grew 4.6%, and passenger car sales fell by almost 25% over the same period as subsidies were reduced, the AP reported.

The weak spending picture matches Monday's inflation data. Consumer prices rose just 0.7% year on year in October, below the 0.8% consensus, and core inflation slowed to 0.8%. Producer prices rose 5.7%, the fastest since June 2022 and above the 5.3% Reuters poll forecast, driven by mining and raw materials. The gap of about five percentage points means factories face rising input costs that households cannot absorb.

Our view: Strong exports, up 35% in October, have reduced Beijing's urgency to stimulate household demand, and analysts quoted by the AP say the same. That leaves Chinese consumer platforms such as Alibaba, JD.com and PDD without a policy tailwind, and it explains why Hong Kong lagged the rest of Asia on Wednesday. Margin pressure from higher input costs is a growing risk for Chinese manufacturers that cannot pass prices on.

Beijing extends its rare-earth pause as Shenzhen prepares for Trump, Xi and possibly Putin

China's Commerce Ministry on Monday extended the suspension of its October 2025 rare-earth export controls by two months to 10 January 2027, part of a broader pause in trade countermeasures, according to Reuters. The paused rules would have covered foreign-made products containing as little as 0.1% Chinese-origin rare earths by value. The separate April 2025 licensing regime for seven heavy rare earths, including dysprosium and terbium, stays in place. US Trade Representative Jamieson Greer said China still needs to fully implement its commitments on farm purchases and critical minerals.

The date matches the US extension of its own "Affiliates Rule" suspension to 10 January, which we reported on Tuesday. Both sides are keeping their weapons holstered ahead of the APEC leaders' meeting in Shenzhen on 18–19 November, where Trump is expected to meet Xi. Trump said on 8 November that a three-way meeting with Xi and Putin would "likely" happen there, though neither Beijing nor Moscow has confirmed it, according to the Japan Times.

Our view: Matching 10 January deadlines set up a deliberate cliff after the summit, which gives both sides leverage. The congressional chip push is the main threat to this calm: if the NDAA language survives, Beijing could respond by letting the rare-earth pause lapse, which would hit US and European makers of motors, defense systems and chips. The heavy rare-earth licensing that was never paused remains a supply risk in any scenario.

EU

Merz ties the next EU budget to multi-year Ukraine funding ahead of Friday's Dublin summit

German Chancellor Friedrich Merz wrote to European Council President António Costa linking Germany's approval of the 2028–2034 EU budget to an agreement, backed by all member states, on reliable multi-year funding for Ukraine, according to the Financial Times and Euronews. Ukraine faces a EUR 70 billion funding gap next year. The FT described the letter as a threat to block the budget; the Kyiv Independent reported that the wording stops short of an ultimatum. Hungary, Slovakia, Bulgaria and Czechia have resisted more Ukraine funding, and all four are net recipients of EU money while Germany is the largest net contributor. Leaders meet informally in Dublin on 13 November and formally in Brussels on 26–27 November.

Our view: This is Germany using its budget leverage to force a decision before US-led peace talks settle anything. For markets, the relevant question is whether the EU ends up funding Ukraine through new joint debt. More common EU bonds would support the euro and European defense names, while a stalemate would raise the risk that Europe's Ukraine bill lands on national budgets already under pressure from defense spending.

Europe's energy bill from the Middle East war passes EUR 100 billion; Brussels funds a Black Sea security hub

At the COP31 climate summit, the UN secretary-general said the EU has paid more than EUR 100 billion in additional fossil fuel import costs since the latest escalation in the Middle East began. Separately, Commission President Ursula von der Leyen announced EUR 50 million for a Black Sea maritime security hub in Romania and Bulgaria after attacks on ships, according to Euronews. European stocks shrugged off the US inflation scare: the Stoxx 600 rose 0.27% to 658.32 on Tuesday, near a record, and Bloomberg reports it was set to open at a new high on Wednesday, led by miners and tech.

Our view: Europe gains most from an Iran settlement because of its energy dependence, which is why the Stoxx 600 has held up better than US tech this week. That advantage reverses quickly if the Hormuz talks fail.

Other News

The yen nears 159 per dollar as US yields jump, putting Tokyo's intervention line back in play

USD/JPY rose to about 158.7–159.0 after the US inflation data, according to FXStreet, as the gap between US and Japanese yields widened again. Japan's Finance Ministry has intervened jointly with the US earlier this year, and the Bank of Japan holds its policy rate at 1.25% with its next decision on 18 December. The Nikkei still rose 0.87% to close near 60,988, led by tech, while SoftBank fell as much as 10.5% after reporting a JPY 1.12 trillion ($7.1 billion) quarterly loss that included $3.7 billion tied to advance payments for US data center equipment, according to Reuters.

Our view: The 159–160 zone is where Tokyo has acted before, so verbal warnings are likely this week if US yields keep rising. A sharp intervention-driven yen rebound would hit Japanese exporters and could unwind carry trades that fund global risk assets. SoftBank's result is a useful reminder that AI infrastructure spending is increasingly financed with debt and prepayments, which makes it sensitive to the rate path set out above.

South Korea's jobs market stays tight as Seoul readies a fuel price cap

South Korea's October unemployment rate came in at 2.5%, below the 2.6% expected, and the government plans to announce a fuel price cap on 13 November, according to market reports. The KOSPI closed up 0.68% at 5,274.98 on Wednesday. A fuel cap would ease headline inflation but adds fiscal cost, and it signals that energy prices remain a political issue across Asian importers despite this week's drop in crude.

Watch today

Wed 11 Nov: Veterans Day: US bond market closed, stock market open on normal hours; volumes typically light.
Wed 11 Nov: Deadline for Nvidia to tell three House chairs whether Jensen Huang will attend the 18 Nov closed-door briefing.
Wed 11 Nov: Second and final day of US–Russia–Ukraine talks in Abu Dhabi.
Wed 11 Nov: Senate floor debate on the permitting bill (data centers paying for grid upgrades) continues; further 60-vote hurdles ahead.
Thu 12 Nov, 02:00 ET: UK Q3 GDP.
Thu 12 Nov, 08:30 ET: US weekly jobless claims (usual schedule). Treasury market reopens.
Thu 12 Nov, 10:00 ET: US existing home sales (October).
Thu 12 Nov: Cleveland Fed President Hammack speaks (time not confirmed); Cisco, Applied Materials and Cerebras report after the close.
Fri 13 Nov, 08:30 ET: US October PPI. Informal EU leaders' meeting in Dublin on the budget and Ukraine funding. South Korea announces its fuel price cap.
Later: German ZEW and UK jobs data 17 Nov; Nvidia earnings 17 Nov; Huang briefing request 18 Nov; APEC leaders' meeting in Shenzhen with expected Trump–Xi meeting 18–19 Nov; EU summit 26–27 Nov; FOMC 8–9 Dec; November CPI 10 Dec; BoJ 18 Dec; US and Chinese trade-truce deadlines 10 Jan 2027.

Sources

Market analysis, not personal investment advice.