To The Moon

Just as Wall Street was recovering from last week's dramatic selloff, another major market catalyst emerged.

The latest U.S. jobs report came in much stronger than expected, pushing market expectations for a December Federal Reserve rate hike sharply higher.

According to the Bureau of Labor Statistics, the U.S. economy added 165,000 jobs in October, compared with economists' expectations of approximately 65,000. The unemployment rate fell to 4.1%, while average hourly earnings increased 0.4% month over month.

Following the report, traders raised their expectations for a December rate hike. By November 9, market-implied odds of a 25-basis-point increase had reached approximately 80%.

And the next major test is just around the corner.

The U.S. October CPI report will be released on November 10 at 8:30 a.m. ET.

After the midterm election volatility and last week's technology selloff, investors are now facing a different question:

What happens to U.S. stocks if the Federal Reserve has to keep interest rates higher for longer — or even raise them again?

1. Strong Jobs Data: Good for the Economy, Complicated for the Fed

At first glance, October's employment report looks encouraging.

The U.S. economy added 165,000 jobs, significantly above expectations. The unemployment rate declined to 4.1%, while payroll figures for August and September were revised upward by a combined 84,000.

Average hourly earnings rose 0.4% in October and 3.1% over the past year.

These numbers suggest that the labor market remains resilient.

For businesses, stronger employment can support consumer spending and economic growth. For households, continued job creation provides a degree of income stability.

But for the Federal Reserve, resilient demand creates a more complicated policy environment.

At its October 28 meeting, the Fed maintained the federal funds rate target range at 3.75%–4.00%.

Notably, two policymakers preferred a 25-basis-point rate increase, highlighting growing disagreement about whether monetary policy is restrictive enough to contain inflation.

The latest jobs report has reinforced that debate.

The market is no longer asking only when the Fed might cut rates. It is increasingly considering whether another rate hike could be necessary.

That shift matters for nearly every asset class.

2. Tomorrow's CPI Could Reset Rate Expectations

The latest available inflation report showed that headline CPI rose 3.7% year over year in September, with prices increasing 0.6% month over month.

Inflation remains above the Federal Reserve's 2% target.

Tomorrow's October CPI report will help investors determine whether inflation pressures are easing or becoming more persistent.

Tiger believes two components deserve particular attention.

The first is core inflation, which excludes food and energy. Sustained increases in underlying prices could make the Fed less comfortable with keeping rates unchanged.

The second is shelter and services inflation. If these categories remain sticky, inflation may prove harder to bring down, even if some commodity prices stabilize.

There are three broad scenarios worth considering.

If CPI comes in below expectations, rate hike bets could ease, potentially providing relief to Treasury bonds and growth stocks.

If CPI exceeds expectations, investors may price in a more aggressive Fed, pushing yields higher and putting additional pressure on expensive equities.

If CPI is broadly in line with expectations, markets may turn their attention to Friday's Producer Price Index report and upcoming Fed commentary.

But one thing is important:

A softer CPI reading would not guarantee that the Fed avoids another hike, just as a stronger reading would not make a hike inevitable.

Markets respond not only to the data itself, but also to how that data compares with expectations.

3. The Nasdaq Just Lost 3.4% in a Week. Is the Rebound Sustainable?

Last week's volatility was extraordinary.

On November 5, the Nasdaq Composite plunged 5.52%, while the S&P 500 fell 4.36%.

Technology and AI-related stocks were among the hardest hit as investors reassessed political uncertainty, infrastructure spending and elevated valuations.

Stocks staged a partial recovery on November 6, with the Nasdaq gaining 1.1%.

However, the index still finished the week down 3.4%, while the S&P 500 lost 2.7%.

On November 9, U.S. stock futures attempted another rebound.

At a Reuters reporting checkpoint of 5:10 a.m. ET, Dow futures were up 0.73%, S&P 500 futures gained 0.40%, and Nasdaq-100 futures advanced just 0.21%.

The divergence is worth watching.

Investors appear willing to buy selected stocks after the selloff, but the recovery in technology shares remains relatively cautious.

That doesn't necessarily mean a sustained rotation away from technology has begun. However, it suggests that risk appetite has not fully recovered.

Tomorrow's inflation data could play an important role in determining whether the rebound gains momentum or faces renewed selling pressure.

4. Which Sectors Are Most Exposed to Higher Rates?

The first group is high-valuation technology stocks.

Companies whose valuations depend heavily on future earnings can be particularly sensitive to rising discount rates.

Even if revenue and profits continue growing, higher Treasury yields may lead investors to assign lower valuation multiples to those earnings.

The second group includes capital-intensive businesses.

Some data centers, infrastructure projects and renewable energy developments depend on external financing.

If borrowing costs remain elevated, project economics and investment returns could become less attractive.

Financial stocks present a more complicated picture.

Higher interest rates can support yields on bank assets, but they can also increase funding costs and credit risks. The overall impact depends on the yield curve, deposit pricing and lending conditions.

Long-duration Treasury bonds are another key area to watch.

When yields rise, existing bond prices generally fall, with longer-duration securities experiencing greater sensitivity.

Gold faces competing influences from real interest rates, the U.S. dollar and safe-haven demand.

The critical distinction is whether higher yields reflect stronger economic growth or persistent inflation concerns.

Those two environments can produce very different stock market outcomes.

5. Can Earnings Growth Offset Higher Interest Rates?

Despite last week's selloff, corporate earnings have remained relatively resilient.

According to LSEG data cited by Reuters, approximately 82.4% of the 335 S&P 500 companies that had reported earnings by late last week exceeded analysts' expectations.

That suggests the market's recent weakness has not been driven by a broad collapse in corporate profitability.

Instead, investors are questioning whether current stock valuations adequately reflect higher financing costs, policy uncertainty and the enormous capital spending required to support AI growth.

This creates an important distinction.

Strong earnings can support stock prices, but they do not automatically protect companies from valuation compression.

If earnings continue to grow while inflation moderates, markets may find a healthier balance between fundamentals and valuations.

But if earnings growth slows while inflation remains elevated, equities could face pressure from both directions.

Slower earnings growth and higher discount rates are a particularly challenging combination.

Tiger View

Tiger believes the biggest risk for U.S. equities right now is not simply the midterm election outcome or concerns about AI valuations.

It is the possibility that investors may need to adjust to a higher interest-rate environment for longer than previously expected.

The AI investment cycle remains substantial, and major technology companies continue spending heavily on infrastructure.

But investors are becoming more demanding about free cash flow, profitability and returns on invested capital.

Meanwhile, persistent inflation could limit the Federal Reserve's ability to support financial markets through easier monetary policy.

That means the next stage of the market may be less about which company delivers the fastest revenue growth and more about which businesses can sustain strong financial performance under tighter conditions.

Tiger will focus on three signals.

First, whether tomorrow's core CPI indicates persistent inflation pressure.

Second, how Treasury yields and December rate hike expectations respond to the report.

Third, whether the Nasdaq can sustain its recovery while corporate earnings continue supporting valuations.

If the next phase looks like:

Inflation cools → Rate hike expectations ease → Treasury yields stabilize → Earnings remain strong,

then U.S. equities may find room for a more sustainable recovery.

But if the pattern becomes:

Employment stays resilient → Inflation remains elevated → Rate hike expectations increase → Growth-stock valuations come under pressure,

then market volatility could persist even if company earnings remain healthy.

So the biggest question today isn't:

"Has the Nasdaq fallen enough to buy the dip?"

It's:

"If the probability of another rate hike is approaching 80%, how much should investors really be willing to pay for future earnings?"

Related Stocks

U.S. Market ETFs: $Invesco QQQ(QQQ)$, $SPDR S&P 500 ETF(SPY)$

Watch: inflation surprises, Treasury yields and broader equity valuations.

Large-Cap Technology: $Microsoft(MSFT)$, $Meta Platforms(META)$, $Alphabet(GOOGL)$

Watch: AI capital expenditure, free cash flow, earnings growth and interest-rate sensitivity.

Long-Duration Treasuries: $iShares 20+ Year Treasury Bond ETF(TLT)${{4849338beb0b465c972205343e1285d9}}

Watch: changes in Treasury yields and expectations for Federal Reserve policy.

Financials: $JPMorgan Chase(JPM)$, $Goldman Sachs(GS)$

Watch: the yield curve, financing conditions, credit demand and capital markets activity.

Gold: $SPDR Gold Shares(GLD)${{d7ca576bfd6d47bf8d6e8c509892e376}}

Watch: real interest rates, U.S. dollar movements and safe-haven demand.

Small Caps: $iShares Russell 2000 ETF(IWM)${{c631cc42542a418a8d3952371d78e6cf}}

Watch: borrowing costs, economic growth and earnings sensitivity.

Today's Poll

With December rate hike odds near 80% and CPI coming tomorrow, what's your outlook for U.S. stocks?

① CPI cools, rate hike expectations fall, and tech stocks rebound

② Inflation stays elevated, keeping pressure on the Nasdaq

③ Economic resilience and earnings growth can offset higher rates

④ Markets may be overreacting — better to wait for CPI and further Fed guidance

For market discussion only. This is not investment advice. Markets involve risk, and investment decisions should be made carefully.

Sources: U.S. Bureau of Labor Statistics October 2026 Employment Situation report (November 6); September 2026 CPI report; Federal Reserve October 28 FOMC statement; Reuters and MarketWatch (November 6–9, 2026). The approximately 80% December rate hike probability reflects market-implied expectations at a reported checkpoint, not an official Federal Reserve decision. October CPI has not yet been released as of November 9.