Wall Street gave back ground Tuesday morning after the October consumer price index came in hotter than expected, with the Dow, S&P 500 and Nasdaq all sliding in early trading. Headline CPI rose 0.4% month over month, above the 0.3% economists had forecast, though still below September's hefty 0.6% jump.

The pullback came a day after one of the more dramatic sessions of the year: the Dow Jones Industrial Average rocketed up 1,104.02 points, or 2.15%, to close Monday at 52,389.75, while the S&P 500 gained 2.35% and the Nasdaq Composite jumped 2.74%. Tuesday's inflation print undercut some of that momentum, with the Nasdaq leading the morning's declines.

The hotter reading matters because it reshapes the betting on the Federal Reserve's next move. Traders are now largely pricing in a quarter-point rate hike in December, with some Fed-watchers eyeing something bigger after Fed Governor Chris Waller signaled he'd be open to a larger move.

THE REPORT CEMENTED BETS ON A DECEMBER RATE HIKE.

Adding to the gloom: Nvidia shares, already down more than 4% in the prior session, stayed under pressure after the chipmaker's board opened an investigation into CEO Jensen Huang over reports linking him to an alleged affair tied to a Chinese espionage case. Crude oil wasn't spared either, with both Brent and WTI futures down roughly 3% on the day.

Elsewhere, Anthropic pushed ahead with its closely watched IPO roadshow, filing an updated prospectus seeking a valuation of roughly $1.4 trillion — a process already drawing skepticism from some investors over the price tag. After the closing bell, traders are watching earnings from CoreWeave, Quantum Computing and Rigetti Computing for fresh signals on whether the AI trade still has room to run.

For now, the market's attention shifts to the Fed's December meeting, with Tuesday's inflation data doing little to settle the debate over how aggressively policymakers need to act.