The Midday Tape

A hotter than expected CPI print has flipped the tape into risk-off mode, with the AI infrastructure trade taking the worst of it as yields and the dollar push higher.

CPI reignites the rate debate.

This morning's inflation data came in at 0.4% month over month, with core CPI at 0.3%, both firm enough to push back on near-term rate cut hopes. The reaction is textbook: the 20-year Treasury ETF (TLT) is down 1.3%, the dollar fund (UUP) is up 0.6%, and gold (GLD) is off 2.4% as real yields firm. Equities are following the bond market lower across the board, with the S&P 500 proxy (SPY) down 0.8%, the Nasdaq-100 fund (QQQ) down 0.9%, and small caps (IWM) the hardest hit, down 1.4%, the classic signature of a market repricing for a higher-for-longer rate path.

The AI picks and shovels trade cracks.

The session's loudest narrative is the unwind in AI infrastructure names, power and data-center-adjacent plays including Caterpillar (CAT), Corning (GLW), GE Vernova (GEV), Vistra (VST), Constellation Energy (CEG), Vertiv (VRT), Quanta Services (PWR), and Eaton (ETN) are all catching selling pressure as investors question how much more capex the buildout can absorb. That skepticism sits awkwardly next to a Goldman Sachs call, via the Financial Times, projecting Anthropic revenue topping $600 billion by 2030, a reminder that the bull case for AI spending hasn't gone away, it's just getting re-priced against a tighter rate backdrop.

Movers of the morning.

MP Materials (MP) is the standout decliner, down 4.7%, even as JPMorgan held a Buy rating and $60 target; Deutsche Bank cut its target to $40 from $53 on the same Buy rating, underscoring a split Street view on the rare earths name. Onto Innovation (ONTO) is bucking its own target cuts, up 2.3% despite RBC trimming to $350 and B. Riley to $308, suggesting the semicap story still has buyers. Beam Therapeutics (BEAM) is in focus after positive topline pivotal data from its Risto-cel trial. On the earnings front, eToro (ETOR) posted third-quarter results alongside a new share repurchase program, while D-Wave Quantum (QBTS), Gilat Satellite (GILT), and BrainsWay (BWAY) also reported this morning.

Still ahead this afternoon.

Watch the long end of the curve for follow-through on the CPI reaction, and keep an eye on whether the AI infrastructure complex stabilizes or extends its slide. After the close, CoreWeave (CRWV) reports, a key data point for the market's read on AI infrastructure demand, alongside Sea Limited, Wix, and a long docket of smaller names.

Bottom line: a hot CPI print has small caps and rate-sensitive AI infrastructure names absorbing the brunt of today's repricing, and the afternoon hinges on whether yields stabilize or keep climbing.