US stocks fall after CPI report shows inflation ticked down but was higher than expected in January
US stocks fell on Tuesday after the January CPI report showed stickiness in inflation, sustaining pressure on the Federal Reserve to keep interest rates at elevated levels.
A third straight win for S&P 500 was in question after stock futures were whipsawed following the first CPI report of 2023. Headline CPI eased to 6.4% year over year from December, but it was slightly higher than the 6.2% consensus estimate from Bloomberg. Price increases for energy and food and rent drove the monthly reading up 0.5%. Core CPI which strips out energy and food prices rose 0.4% for the month.
"Perfect spoiler for Valentine's day: markets were expecting to get further confirmation that a) peak is in and b) decline is at least steady, if not accelerating. This is critical for the disinflationary narrative and any hope for fed cuts this year. We got neither," Jan Szilagyi, CEO of investment research firm Toggle AI, wrote in a note.
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