U.S. stocks fall as inflation report tops forecasts

U.S. stocks fell Tuesday after a government report showed inflation was higher last month than economists expected, with the S&P 500 dropping 0.6 percent and the Nasdaq composite down 0.8 percent. The report showed prices for groceries, electricity, and other living costs rose more than forecast, potentially pushing the Federal Reserve to hike its main interest rate in December. Fed Governor Christopher Waller hinted at a half-point increase, double the typical amount, after the underlying inflation measure hit the 0.3 percent threshold he set. The 10-year Treasury yield jumped to 4.97 percent from 4.88 percent, pressuring stocks, especially AI-related shares like Nvidia, which fell 3.8 percent. Oil prices also dropped 3.1 percent to $89.67 per barrel after President Donald Trump said the war in Iran was "effectively over."