US stocks fall on hot inflation report

US stocks closed lower on Tuesday, as a hotter-than-expected inflation reading hardened expectations for a rate hike from the Federal Reserve next month and fuelled concerns the US central bank may be more aggressive in raising rates. The US Labour Department said the Consumer Price Index increased 0.4 percent last month, its third straight gain of 0.4 percent or more and above the 0.3 percent estimate of economists polled by Reuters, after advancing 0.6 percent in September. The data came after Fed Governor Christopher Waller said the central bank should raise short-term borrowing costs in December even if data showed inflation cooled last month, and should consider an upsized half-point rate hike if the inflation picture worsens. Markets are now completely pricing in a rate hike of at least 25 basis points at the Fed's December meeting, according to CME FedWatch, up from 84 percent on Monday, while expectations for a 50 basis point increase climbed to 11.8 percent after garnering no consideration at all in the prior session. The 2-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, surged nearly 18.9 basis points to 4.736 percent and was poised for its biggest daily gain since April...