Wall Street Falls on Higher Inflation Data; Israeli Stocks Decline

Major New York stock indices experienced declines on Tuesday, reversing gains from the previous day, following the release of U.S. inflation data that exceeded expectations. The Dow Jones Industrial Average fell 0.7%, the S&P 500 lost 0.7%, and the Nasdaq Composite weakened by 0.9%. This downturn occurred after a strong Monday, where the Nasdaq surged 2.7%, the S&P 500 rose 2.3%, and the Dow Jones climbed 2.2%, marking the best trading day for the indices since April.

The latest Consumer Price Index (CPI) for October showed a 0.4% increase, higher than the projected 0.3%. The core CPI, excluding food and energy, also rose by 0.3%, exceeding the 0.2% forecast and marking the third consecutive month of this increase. These figures have intensified concerns about further interest rate hikes by the Federal Reserve. Christopher Waller, a member of the Fed's board of governors, supported a December interest rate increase of at least a quarter percentage point, and suggested a half-point hike if inflation continues to accelerate.

Nvidia, a prominent chip manufacturer, was a focal point, shedding 5.4% of its value. The company continues to face pressure amid reports concerning its CEO, Jensen Huang, and allegations of potential assistance in transferring chips to China. These claims, which have been reported in the media but not proven, are contributing to the stock's decline. Other chip stocks also experienced weakness, with concerns over interest rate hikes compounding uncertainty in the artificial intelligence sector. AMD, Nvidia's second most active stock, saw a 2.5% increase, while SkyDance fell 8.8%.

Among Israeli companies, Gilat Satellite Networks experienced a significant drop, losing approximately 20% in Wall Street trading. This decline followed the company's third-quarter earnings report, which revealed revenues of $116.2 million, falling short of analysts' expectations of around $126.5 million. In Tel Aviv trading, Gilat's stock closed down about 18%. Despite a reported adjusted earnings per share of 18 cents, surpassing the 14-cent forecast, investors focused on the revenue shortfall and the revised annual outlook, even though Gilat's defense sector grew by 53% during the quarter. Monday.com also saw a decline of about 2.3%, and Wix lost approximately 3%.