Nasdaq 100 Forecast: NDX falls after hotter inflation, Anthropic IPO details announced

US futures         

Dow futures -0.25%, S&P 500 futures -0.5%  & Nasdaq futures  -0.7%

European futures

FTSE 0.1%,  DAX  1%

• US stocks fall after hotter inflation
• US CPI rises 0.4% MoM vs 0.3% forecast
•  Anthropic  plans to IPO 825 million shares at $70 - $78
• Oil falls further on hopes of Iran diplomacy

U.S. stocks fall as hotter inflation weighs

U.S. stocks are opening lower after hotter-than-expected inflation added to December rate-hike expectations.

U.S. CPI came in at 0.4% month-on-month, ahead of the 0.3% increase expected. Meanwhile, core CPI rose 0.3%, ahead of the 0.2% gain forecast.

The data, combined with hawkish commentary from Federal Reserve Governor Christopher Waller, has prompted traders to price in more aggressive Fed rate hikes. Waller warned that hotter-than-expected inflation could see him support an outsized hike.

The market is now pricing in a 95% probability that the Fed will hike rates next month, up from 80% yesterday. Rate expectations further out also moved higher, with 62 basis points' worth of cuts priced in through to December 2027, up from 57 basis points prior to the data.

Treasury yields are rising, with the 10-year yield at 4.96%.

Corporate movers

Anthropic will be in focus after saying it will offer 825 million shares in its upcoming IPO at a price range of $78 to $78 per share. This is expected to take place around November 19 and comes roughly five months after SpaceX's record IPO. Anthropic is targeting a retail allocation of around 20%, a much higher percentage than typical IPOs, which tend to allocate 5% to 10% to retail investors. This would net Anthropic up to $64.4 billion in proceeds.

This puts the company's valuation at $1.40 trillion on a fully diluted basis, up from the $965 billion valuation from a funding round in May.

Nvidia is edging lower following a 4.5% drop on Monday amid claims that CEO Jensen Huang had an affair with a Chinese spy. Wall Street is assigning around a 15% chance to his removal as CEO of Nvidia, with an 85% probability that he stays after the board investigation is completed. The investigation will probably take around four to six weeks, which could create an overhang on the stock until then, particularly ahead of Nvidia's earnings later this month.

Nasdaq 100 forecast – technical analysis

The Nasdaq found support around the 26,300 support zone, a level that also came into play as resistance in January, and rebounded higher. However, the price remains below the 50 and 200 EMAs, while the RSI is below 50, keeping the bearish bias intact.

Buyers would need to retake 28,000, the 200 EMA and the 38.2% Fibonacci retracement of the move from the 22,800 low to the 31,365 high, to put the price on a firmer footing. Above here, attention would turn to 29,300, the 50 EMA and the 23.6% Fibonacci level. A rise above 30,000 could turn the outlook more constructive.

Failure to retake 28,000 could see attention turn once again towards 27,100, the 50% Fibonacci retracement, and the July low. A break below here could see a retest of the 26,300 support zone.

FX markets – USD rises, GBP/USD falls

The U.S. dollar is rising after hotter-than-expected U.S. inflation data. The data comes after hawkish comments from Federal Reserve Governor Christopher Waller, who argued for further hikes. The market's pricing in a 95% chance of a December hike is keeping the dollar supported.

EUR/USD is falling amid a stronger U.S. dollar and despite falling oil prices. Meanwhile, the situation in France continues to create headwinds as political and fiscal instability weigh on sentiment. Reports that ECB President Christine Lagarde will be leaving the central bank before the end of her term have added to uncertainty.

GBP/USD is falling against the stronger U.S. dollar, pulling back from recent highs after the Bank of England raised interest rates last week. However, falling oil prices could mean the central bank will be under less pressure to hike rates aggressively. Expectations for a December hike have eased back to 50/50. Attention will also be on UK GDP data on Thursday, which is expected to show growth of 0.7%.

Oil extends declines on hopes of diplomacy in the Middle East

Oil prices are falling, extending losses to multi-month lows after President Trump reduced expectations for additional military action in Iran.

Brent trades 1.7% lower at $90 a barrel, while WTI is down 1.8% to $85 a barrel. Both benchmarks fell 2% yesterday. Brent is now down 22% from its six-month high reached at the end of October.

President Trump said that he plans to hold off on new military strikes against Iran, giving talks and diplomacy time to make progress.

The President appears to have shifted tone slightly following the midterm elections. Meanwhile, the Democrats taking control of Congress could also make further escalation less likely. This helped Brent tumble 16% last week and WTI drop 12%.

Despite the sell-off, prices may struggle to fall significantly lower without more concrete signs of de-escalation and progress in diplomacy. This is particularly the case given that the risk to shipping remains high as Iran continues to attack vessels transiting the Strait of Hormuz.