Stocks experienced a decline on Tuesday following a surge in Treasury yields, prompted by hotter-than-expected inflation data for January. This development raised uncertainties about the Federal Reserve’s ability to implement multiple rate cuts throughout the year, a key factor supporting the bull case for the equity market.
The Dow Jones Industrial Average closed at 38,272.75, shedding 524.63 points, or 1.35%, marking its most significant percentage decline since March 2023. The index reached a low of 757.52 points, or 1.95%. The S&P 500 also saw a decline of 1.37% to end at 4,953.17, while the Nasdaq Composite fell by 1.8% to settle at 15,655.60.
The Russell 2000 index plummeted by nearly 4%, experiencing its most severe decline since June 2022.
In other news, the consumer price index (CPI) for January showed a 0.3% increase from December, with an annual rise of 3.1%. Economists surveyed by Dow Jones had anticipated a 0.2% month-over-month increase in January and a 2.9% rise from the previous year.
Core prices, excluding the volatile food and energy components, increased by 0.4% from the previous month and 3.9% from a year ago. Expectations were for a 0.3% increase in core CPI for January and a 3.7% rise from the previous year.
Source (CNBC)
