If tonight’s CPI exceeds expectations, U.S. tech stocks may be in for a rough ride!

U.S. stock investors may want to clutch their coffee cups tonight!
The U.S. October CPI is about to be released. What the market fears most isn’t rising prices themselves, but persistently stubborn inflation forcing the Federal Reserve to keep tightening monetary policy.
If the data comes in above expectations, bets on a December rate hike could intensify further. For U.S. stocks, that would definitely not be welcome news.
Why are tech stocks especially sensitive?
Because tech companies’ valuations are largely based on expectations for future earnings. When interest rates rise, the discounted value of future cash flows falls. Simply put, future earnings that were once worth 100 yuan may now be worth only 90 yuan.
This is especially unfavorable for high-valuation growth stocks.
The Nasdaq, AI-related stocks, and companies sensitive to financing conditions could all face valuation pressure.
However, U.S. stocks aren’t guaranteed to fall. If corporate earnings are strong and economic growth is resilient, the market may also be able to absorb rate-hike expectations.
What’s truly worth watching out for is an unfavorable shift in both inflation and economic growth. That’s the combination investors least want to see.
After tonight’s CPI release, it’s worth keeping a close eye on the 2-year Treasury yield, the U.S. Dollar Index, and the Nasdaq.
Do you think U.S. stocks have already priced in the risk of rate hikes, or is a bigger correction still ahead?#每周来晒 and #美国10月CPI即将公布 $SNDK