S&P 500 Down On Hot CPI. Sell Or Hold?

November 11th, 2026 · by Trefis Team
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More on inflation and the market: Inflation Is Back. Is A Stock Market Crash Next?

It was 8:31 on Tuesday morning, the coffee wasn’t finished, and the phone was already red. October prices rose 0.4%, not the 0.3% economists expected, and core prices rose 0.3% against 0.2%. By the close the S&P 500 was down about 0.4%, at 7,520.93, and the Nasdaq about 0.7%. The question that followed you to lunch: does a drop like this last, or is it the start of something worse?

We measured every CPI release day since January 2018 that markets were open, 104 of them before Tuesday’s. On the 30 days the S&P 500 fell 0.3% or more, as it did Tuesday, it was higher three months later 21 times out of 29, by a median 5.1%, and higher a year later 21 of 28 times, by a median 11.9%. The price of waiting was a median worst dip of 5.9% within those three months.

That 5.9% is the normal toll after a hot print. For families with seven figures invested, it’s about $124,000 on $3 million held 70% in stocks. Would you sell into it? A Trefis partner firm can stress-test your plan in a free 15-minute call.

Image from Pixabay

Why Did A Tenth Of A Point Move Markets?

Because a hot print means the Fed may raise rates again. After Tuesday’s report, futures fully priced a quarter-point hike at the Fed’s December 8-9 meeting, and the odds of a half point rose to about 14%, according to CME FedWatch. The 10-year Treasury yield climbed to 4.98%. Higher rates make profits far in the future worth less today, which is why the Nasdaq, home of the AI trade, fell more than the S&P 500; Nvidia had its own bad news too. AI power names also fell.

It fits the inflation story: war, immigration and taxes push prices up, and AI is a fourth fuel, as data centers bid up power, chips and construction. Hikes haven’t sunk stocks for long. The S&P 500 was higher a year after 34 of the 37 Fed hikes from 2004 to 2023.

Does The First Day Tell You Anything?

After an S&P drop of 0.3%+ on CPI day Higher Median
1 month 19 of 29 +1.7%
3 months 21 of 29 +5.1%
12 months 21 of 28 +11.9%
12 months, all 104 CPI days 78 of 93 +15.5%

Almost nothing. The CPI-day direction matched the next 12 months only 7 of 28 times. Even on the 12 days the S&P fell 1% or more, it was higher three months later 9 times out of 11.

Some of the worst CPI days were far bigger than Tuesday, and some were about more than inflation:

CPI day S&P that day 1 year later
Mar 11, 2020 (pandemic) −4.9% +43.7%
Sep 13, 2022 −4.3% +14.6%
Apr 10, 2025 (tariffs) −3.5% +32.3%
Jun 10, 2022 −2.9% +12.0%
Feb 10, 2022 −1.8% −8.1%

September 2022 fell another 9% the next month. February 2022, five weeks before the first hike, was the one year in this table that stayed red.

Where Didn’t It Come Back?

1 year after an S&P drop of 0.3%+ on CPI day Higher Median
Nasdaq 21 of 28 +16.4%
S&P 500 21 of 28 +11.9%
Regional banks (KRE) 14 of 28 −2.3%
Long bonds (TLT) 10 of 28 −9.0%

Regional banks and long bonds, the assets most tied to rates, often didn’t.

What Should You Do This Week?

  • Rebalance by rule, not by headline. Pick a stock target, say 70%, with a band of 5 points either way. A 6% dip in stocks moves a 70% mix to about 69%, well inside the band: nothing to do.
  • Skip the reactive move. Don’t sell on CPI day. Its direction pointed the wrong way for the year 21 times out of 28.
  • Watch two dates. The Fed decides on Wednesday, December 9, and November’s CPI lands the next morning, Thursday, December 10. The Fed moves before it sees the next print.

“The question in front of you is rarely the one that will matter in five years.” – Anonymous

What Should You Ask Next?

Would Your Plan Sit Through A 6% Dip?

Hot prints change the odds, not your plan. If you have $1 million or more invested, get a second opinion on yours in a free 15-minute call with a Trefis partner firm.

For questions about this article or underlying research, email help@trefis.com.

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