CPI Report: October Inflation Rose 0.4%, Hotter Than Expected

Last updated: Tuesday, Nov. 10, 2026, 9:30 a.m. ET. This is a developing story. Regular trading just opened, and we'll update as markets and Fed officials react.

Inflation didn't cool as much as Wall Street hoped. The consumer price index rose a seasonally adjusted 0.4% in October, the Bureau of Labor Statistics said Tuesday morning. Economists surveyed by Dow Jones had expected 0.3%, CNBC reported.

Core CPI, which strips out food and energy, rose 0.3%. The forecast was 0.2%. It's the third straight month core prices have gone up 0.3%.

That's a smaller jump than September's 0.6%. But it was still a miss in the wrong direction, and it landed a day after the market's best rally in months.

What the October CPI report shows

Housing did a big share of the damage. The shelter index climbed 0.3% and made up more than 30% of the overall monthly increase, the BLS said. Rent rose 0.2% and owners' equivalent rent 0.3%.

Groceries and restaurants both got pricier. Food rose 0.5% after being flat in September. Food at home was up 0.4%, with beef up 0.9% and snacks up 1%. Eating out rose 0.5%, and full-service restaurant meals jumped 0.7%.

Energy rose 0.7%, a much smaller gain than September's 5.2% surge. Gasoline was up 1% on a seasonally adjusted basis, though the BLS noted that before adjustment, pump prices actually fell 0.7% in October. Electricity rose 0.9%.

Other categories that went up:

• Recreation, up 0.8%
• Car insurance, up 0.7%
• Hospital services, up 0.8%
• Prescription drugs, up 0.3%

There was some relief. Used car and truck prices dropped 1.2%, and communication fell 0.1%.

Why there's no annual inflation rate this month

If you're looking for the usual "inflation is X% over the past year" number, the BLS didn't publish one. It couldn't collect survey data in October 2025 because of the government shutdown, so for most categories there's no year-ago figure to compare against.

A few items do have 12-month numbers. Gasoline is up 37.4% from October 2025. Used cars are down 3.3%, and new vehicles are up 0.7%.

For context, Reuters reported that annual inflation hit 3.7% in September. Reuters pointed to higher oil prices from the U.S.-Israeli war with Iran and last year's tariffs as the main forces keeping the cost of living up. If you want more on oil, our gas prices explainer covers where prices at the pump are headed.

What it means for a December Fed rate hike

This is the part markets care about most. After the release, traders fully priced in a quarter-point rate increase at the Federal Reserve's Dec. 8-9 meeting, CNBC said, citing CME Group's FedWatch tool. The odds of a bigger half-point move stood at 13.6%.

That talk of a bigger hike didn't come out of nowhere. Overnight, Fed Governor Christopher Waller suggested the central bank should hike next month even if the report was soft, and said a half-point move might be on the table if it came in strong, CoinDesk reported.

"This was the report the market could least afford to see," Karen Manna, fixed income investment strategist at Federated Hermes, told CNBC.

The Fed held its benchmark rate at 3.75% to 4% at its October meeting in a 10-2 vote. We covered that decision in our look at what the Fed's October hold means. A hike would likely mean higher rates on credit cards and other variable-rate loans.

How stocks and bonds reacted

Stock futures slid right after the 8:30 a.m. release. Nasdaq 100 futures were down about 1.15% and S&P 500 futures about 0.5% shortly after, according to CoinDesk, while Dow futures were close to flat. The 10-year Treasury yield rose to about 4.93%, and the 2-year yield jumped about 14 basis points to 4.69%.

Bitcoin dipped to around $73,600, CoinDesk said.

That pullback follows Monday, when the Dow jumped more than 1,100 points as tech stocks bounced back. Here's our story on Monday's Dow rally.

What we don't know yet

We don't know how stocks will close today, and early moves often shift as the session goes on. Fed officials haven't publicly responded to the report yet. The producer price index, another inflation gauge, comes out Friday.

The next CPI report, for November, is set for Dec. 10 at 8:30 a.m. ET. That's the day after the Fed's December decision, so policymakers will vote without it.