Inflation Figures Fuel Rate Hike Expectations Amid US Market Volatility

The US dollar and Treasury yields rose on Wednesday as investors digested hotter-than-expected inflation figures. The personal consumption expenditures (PCE) index, the Federal Reserve's preferred measure of inflation, came in at 3.7% annual rate, exceeding forecasts.

The increase in headline inflation was 0.2%, above the predicted 0.1%. Core inflation also rose, with a monthly increase of 0.246%, close to 0.3%. Despite these numbers, market participants still expect a 60-40 probability of a rate hike next month.

Nvidia's quarterly revenue and earnings surpassed estimates, but shares fell in after-hours trading due to a projected dip in gross margins from 75% in Q2 to 74% in Q3. This margin reduction may signal a turning point for the company.