The Dow Jones Industrial dropped by 1.35%, or 525 points, at closing and amounted to 38,272.75 points. The S&P 500 fell by 1.37% at the end of the day. and amounted to 4,953.17 points. The Nasdaq Composite fell 1.80%. and closed the session at 15,655.60 points. The Russell 2000 small-cap index fell 4.30 percent to 1,957.93 points. The VIX volatility index increased by 13.85%, to 15.86 points. CPI in the US increased by 3.1% in January. on a y/y basis, and m/m increased by 0.3%. Expected +2.9%. y/y and +0.2 percent mdm. Core inflation increased by 0.4%. mdm and 3.9 percent rdr. Expected +0.3%. mdm and +3.7 percent rdr.
“Today’s data is not what the markets or the Fed would like to see”
“Today’s data is not what markets or the Fed would like to see, but it is important not to overreact and quickly assume that inflation is gaining momentum. March interest rate cut. is completely out of the question, but May could still be important if economic activity takes over the narrative and finally starts to show the impact of the Fed’s earlier monetary tightening,” said Seema Shah, chief global strategist at Chief Asset Management.
“Markets are taking this quite hard because it puts the final nail in the coffin of early rate cuts. This is evidence of a still robust economy. We still need to squeeze inflation out of the system,” said Carol Schleif, chief investment officer at BMO Family Office.
Investors are wondering whether the stock market rally can continue. “Markets had a good run, so investors took some money out of the market ahead of potentially important data,” said Samuel Zief, head of global currency strategy at JPMorgan Private Bank.
Chris Verrone, head of technical and macroeconomic research at Strategas, believes the narrative about how tight the market is is exaggerated. “Small caps are doing better and better, the S&P 500 just hit a two-year high, so the idea that it was just five, six or seven companies that were driving it all, I think, is misleading,” he said.
As for rate cuts, it is almost certain that they will start this year
“High volatility in the market remains due to attempts to estimate the number of interest rate cuts by the end of the year. This will not change regardless of what today’s data indicates. When it comes to rate cuts, it is almost certain that they will happen this year will start. The question is about their size and the time horizon for their implementation,” said Daniela Hathorn, senior market analyst at CapitalCom.
After the publication of inflation data, the yield of 2-year US treasury bonds increased to 4.63% and the yield of 10-year Treasuries to 4.29%. About 2 percent each. shares of the largest technology companies, including Microsoft and Amazon, fell. Nvidia Corp. decreased by 0.17 percent although UBS Group AG analysts raised their price target for the chipmaker’s stock to $850. JetBlue Airways Corp. increased by over 21 percent Investor Carl Icahn revealed that he had 9.91 percent. shares in JetBlue. Icahn assessed the stock as undervalued and said he had spoken to the board about possible representation on the board.
Toy maker Hasbro fell more than 1 percent. after the company failed to meet analysts’ expectations for fourth-quarter earnings. Biogen fell more than 7%. In Q4, revenues amounted to USD 2.39 billion against the expected USD 2.46 billion. Coca-Cola fell 0.5 percent, although the beverage manufacturer’s revenues amounted to USD 10.8 billion against the expected USD 10.67 billion. Avis Budget Group shares fell almost 23%. due to disappointing fourth quarter revenues.
On the oil market, WTI futures for March are priced at USD 77.72 per barrel, up 1.04%, and April Brent futures are up 0.71%. up to USD 82.58/b.
