Stocks cut gains, dollar and yields up as US CPI cements December rate hike bets

Stocks pared their gains while the dollar and Treasury yields rose after a US CPI print reinforced market expectations of a December Federal Reserve rate hike. The move reflects a repricing of inflation and policy-rate expectations: firmer inflation data lifts real yields and widens the rate differential against the euro and yen, pulling capital toward dollar-denominated assets. Long-duration equities such as the Nasdaq 100 are most exposed to the rise in yields because higher discount rates compress the present value of future earnings, while high-multiple semiconductor names like NVIDIA are especially sensitive to that shift in risk appetite. The euro and yen are pressured by the widening yield gap, and Korea's KOSPI, with its heavy technology and export exposure, faces spillover from both dollar strength and weaker global risk sentiment. Traders will watch the next US PCE inflation release and Fed speaker commentary for confirmation of whether the December hike pricing holds.

The Euro (EUR) is the currency of 20 European Union member states. Major EUR movers include ECB Governing Council decisions, Eurozone CPI prints, Bund/BTP spread events, and political risk from France, Germany and Italy.

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