The stock market tumbled Wednesday after consumer prices rose more than expected in January. The S&P 500 slipped 0.27%, and the Dow Jones Industrial Average tumbled 225.09 points, or 0.5%. The Nasdaq eked out a 0.03% gain.
In addition to remarks from several Federal Reserve officials, the weekly look ahead for the global economy and markets includes:
The minutes of the Fed’s January policy meeting;
The final UMich sentiment survey data for January;
UK wage and CPI inflation data; and…— Mohamed A. El-Erian (@elerianm) February 16, 2025
A Bloomberg chart showing developments in four measures of consumer price inflation in the US. #economy #inflation #markets pic.twitter.com/WP1xR1WGA7
— Mohamed A. El-Erian (@elerianm) February 16, 2025
“The hotter-than-expected CPI confirms investors’ anxiety regarding too-hot inflation that will keep the Fed on the sidelines,” said Sameer Samana, Wells Fargo Investment Institute head of global equities and real assets. January’s consumer price index rose 0.5% for the month, putting the annual inflation rate at 3%. Both were more than the respective 0.3% and 2.9% increases expected by economists.
Inflation is draining the pocketbooks of those just trying to put food on the table.
That’s why in Congress, I remain laser-focused on bringing costs down, lowering taxes, and making life more affordable for hardworking families. https://t.co/FlDXBC1KZb— Rep Josh Gottheimer (@RepJoshG) February 15, 2025
Excluding volatile food and energy prices, core CPI rose 0.4% on the month and 3.3% for the past 12 months, both higher than expected. Yields on the 10-year Treasury note rose to a session high of 4.66%. Shares of some megacap technology stocks declined.
January inflation impacts market declines
Consumer shares and bank stocks also retreated. Fed Chair Jerome Powell testified before Congress on Wednesday and said the latest CPI data is a reminder that the Fed has made “great progress” toward bringing inflation closer to its 2% target but that it is “not quite there yet.”
“We want to keep policy restrictive for now,” he said.
Quantum computing stocks soared on Wednesday as traders bought the dip. IBM gained about 6%, while Rigetti Computing gained 12%. CVS shares rose more than 16% after reporting better-than-expected earnings.
The company reported fourth-quarter adjusted earnings of $1.19 per share on revenue of $97.71 billion. Small-cap stocks saw outsized losses on Wednesday. The Russell 2000 dropped nearly 0.8% in the session, compared to the S&P 500’s 0.2% decline.
The New York Stock Exchange announced one of its electronic exchanges, NYSE Chicago, will reincorporate in Texas and be renamed NYSE Texas. “Texas is a market leader in fostering a pro-business atmosphere,” said Lynn Martin, NYSE Group president.
