US consumer prices rose 0.4% in October from September, above the 0.3% economists expected, though cooler than September's 0.6% gain. Core inflation, which excludes food and energy, rose 0.3%, also hotter than forecast.
Traders now see an 84% chance that the Federal Reserve raises rates by 25 basis points in December. Bets on a 50-basis-point hike jumped from 0% to 15% in a day. The 10-year Treasury yield rose 7 basis points to 4.93%, and the dollar strengthened.
Stocks opened lower: the Nasdaq fell about 1.2% and the S&P 500 about 0.65% in midday trading. Fed Governor Chris Waller said in London he leans toward a 25-basis-point hike in December and would consider a larger move if price pressures stay hot.