Stocks slipped on Tuesday, 10 November, as a hotter October inflation report lifted bets on a December rate hike and Nvidia (NVDA) slid, the S&P 500 falling 0.38%, while six of the 11 sectors rose. The Nasdaq Composite lost 0.74% and the Russell 2000 0.68% at the close.

The inflation report set the tone for the session. Consumer prices rose 0.4% in October against the 0.3% forecast, and core prices also came in above forecast. Two Fed officials pressed the case for tighter policy. Governor Christopher Waller said he supports a December rate hike, and Dallas Fed President Lorie Logan said at least two more hikes are needed. Treasury yields rose across the curve, and rate-sensitive companies fell with them.

Nvidia accounted for most of the index's decline on its own. President Trump said the FBI is investigating chief executive Jensen Huang over an affair with an alleged Chinese spy, and Huang admitted the affair. The shares fell 5.53%. The selling also revived the month's worry about what AI shares are worth, as a more modest valuation for a leading AI company added to the pressure on chip stocks. The chipmakers split by the close, with Broadcom (AVGO) rising against its group.

Tuesday's selling was about how far the Fed still has to raise rates. The market-implied odds of a quarter-point hike on 9 December reached 100%, from 86% in the previous session, as the chart shows. Rate-sensitive companies underperformed the companies least sensitive to rates by 1.13%, after a month in which they had led by 25.36%. The likelier explanation is a repricing of the Fed's path, since the reversal came on the day a December hike became fully priced and Logan argued for more after it.

Beyond Nvidia, the day cut risk without overturning the market's leadership. The broad market fell 0.31%, a milder fall than the index's, with every covered share counted equally. High-beta shares underperformed low-beta shares by 1.49%, extending a month in which low-beta shares have led by 15.84%. The past year's leaders outperformed the past year's laggards by 0.86%, and financials led the sectors. On the evidence, the session trimmed the most volatile shares and left the trend in leadership intact.

Technology's fall lands on a price that already assumes slower growth than analysts expect. The sector fell 1.14%, the weakest of the day, and its trailing P/E sits in the bottom 15% of its days since June 2022. Its price needs 9% a year of earnings growth, against the 16% analysts expect from its typical company next year. A multiple this low returns toward its median through the price recovering or through earnings falling short, and the gap between those growth rates favours the price recovering, provided analysts' forecasts hold through the coming reports. The day's damage came mainly from news about Nvidia's chief executive, so the sector's discount widened on a fall that brought no new word on demand.

Bonds and gold gave shares no cover. The two-year Treasury yield rose 17 bp, more than the ten-year's 10 bp climb to 4.98%, the shape of a move driven by the Fed's path. Gold fell 2.05% alongside shares as the dollar strengthened, which marks a day of raising cash and a haven bid that never came. Brent crude fell to $91.49 a barrel after President Trump said the Iran war could end fairly soon.

Asia closed before the inflation report and rallied. The KOSPI gained 4.39% and the Nikkei 225 2.87%, though both stay lower on the week. Europe traded through the release and ended mostly higher, with the DAX up 0.31%, while the pound fell 0.69% against the dollar.

Faircurve's model reads the day as a cut in risk centred on one name. The shares the model flags as value traps fell 1.19%, more than the shares the model rates cheapest, which lost 0.51%. Thursday's jobless claims will show whether the labour market gives the Fed reason to keep raising rates after December.

• Nvidia (NVDA) fell 5.53% as the FBI inquiry into its chief executive weighed on the shares, extending its loss over the week to 18.33%.

• TransDigm Group (TDG) rose 0.61% in after-hours trading after earnings of $12.44 a share beat the $12.21 estimate. The session's 0.55% gain came before the result.

• Broadcom (AVGO) rose 3.91% on a day Nvidia fell, leaving it little changed on the week. The model's fair value sits 9.6% above its price, evidence grade medium.

• Newmont (NEM) fell 4.15% as gold dropped, though the shares remain 11.62% higher on the week. The model's fair value sits 0.2% above the price, evidence grade medium.

Cisco (CSCO) reports on Wednesday, with analysts expecting earnings of $1.32 a share. Applied Materials (AMAT) follows on Thursday at $4.05, the first test of whether chip-equipment demand holds after the month's selling in the chipmakers. Walt Disney (DIS) also reports on Thursday, expected at $1.66 a share. Home Depot (HD) reports on Tuesday 17 November against an estimate of $3.87, a read on housing demand after homebuilders fell 3.28%.

Tue 10 Nov, sorted best to worst on the day, with the model’s read.

Six of 11 sectors rose, led by financials (+0.52%), while technology is down 4.29% on the week and energy, despite a gain on the day, is down 6.70% with oil. The model's fair value sits 4.6% above technology's price at the median, the widest gap among the sectors.

The session’s biggest moves among large companies the model values.

The day's losers split between Nvidia's governance news and the precious-metals slide, with Newmont (NEM) falling alongside gold, while health-care names CVS Health (CVS) and Humana (HUM) led the gainers. The model's fair value sits 31.1% above Nvidia's price, evidence grade medium.

What investors trade, read through the theme funds.

Low-beta themes led on a day of cutting risk, and the growth and real-economy themes moved together. Aerospace and defence finished first, up 0.95%, while gold miners fell 5.43% as gold slid. The model sees semiconductor shares 6.7% below fair value at the median, after a month in which the group trailed the S&P 500 by 14.16%. The month's selling has carried the chipmakers below the model's fair values.

Faircurve’s credit gauge: spreads implied by bond-fund prices.

CCC widening flag: Faircurve's credit gauge flags a widening in the lowest-rated tier: an implied move of about 86 bp over the last 20 sessions. The CCC-to-high-yield gap is 987 bp, wider than on 99% of days over three years.

The high-yield spread is in the top 17% of weeks over the past three years (high), rising for four weeks.

Lenders separated the riskiest borrowers from the rest of high yield. On Faircurve's credit gauge, which reads spreads from bond-fund prices, the high-yield spread narrowed while the CCC spread widened, with its widening flag on. The CCC spread over high yield sits at 987 bp, in the 99th percentile of three years. Such decompression reaches the lowest-quality tier within high yield first.

The odds now price December's hike as settled, up 22 points since 2 November, and Logan's call for at least two more hikes turns attention to the 27 January decision. The bills agree with the odds, rising steadily from one month to a year, and Thursday's Fed speakers will show whether others share her view.