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Stocks drop, dollar and yields gain after hot United States inflation information

World stock market indexes fell while the U.S. dollar hit threemonth peaks and Treasury yields climbed on Tuesday after information revealed U.S. inflation slowed less than expected in January.

The U.S. consumer rate index report reinforced expectations that the Federal Reserve will hold rates of interest stable in March.

Investors controlled bets on how much the Fed will cut rates this year.

The consumer cost index increased 0.3% last month after getting 0.2% in December, the Labor Department's Bureau of Labor Statistics said on Tuesday. Yearly revisions to the CPI data published last Friday were blended, however usually revealed inflation was on a downward trend after surging in 2022.

Economic experts surveyed had actually anticipated the CPI acquiring 0.2% on the month and increasing 2.9% year-on-year.

The inflation rate has actually fallen from a peak of 9.1% in June 2022, triggering the Fed to call time on rate hikes and start considering cuts.

Markets are taking it quite hard since it puts a nail in the casket of early (March) Fed rate cuts, said Carol Schleif, primary investment officer at BMO Household Office in Minneapolis, Minnesota. It's proof of a still-sturdy economy. There's. still inflation to be wrung out of the system.

The Dow Jones Industrial Average fell 666.18 points,. or 1.72%, to 38,131.04, the S&P 500 lost 82.44 points, or. 1.64%, to 4,939.40 and the Nasdaq Composite lost 304.13. points, or 1.91%, to 15,638.24.

U.S. stocks have been trading at record highs, improved by. the huge technology companies and expectations the Fed will quickly. cut rates.

The MSCI world equity index, which tracks. shares in 49 nations, lost 1.34%. The Europe-wide Stoxx 600. index was last down 1.2%, having traded 0.47% lower. before the data.

The dollar hit a three-month peak against the Japanese. yen, topping 150 yen for the first time considering that November.

The dollar was last up 1.01% against the yen at 150.85 . The euro was down 0.6% on the day at $1.0703,. while the dollar index, which tracks the greenback. against a basket of currencies of other major trading partners,. was up 0.7% at 104.92.

In cryptocurrencies, bitcoin touched its highest. considering that December 2021 at $50,383, but was last down 1.4% at. $ 49,128.

The yield on benchmark 10-year Treasury notes. rose to 4.3123% compared with its U.S. close of 4.17% on Monday.

Financiers on Tuesday were pricing in around 94 basis points. of cuts from the Fed by the end of the year, below around. 112 before the CPI data.

They saw a 40% possibility of the first cut coming by May,. compared with 71% formerly, according to cash market rates.

Around 145 basis points of cuts were priced in at the start. of February, but strong economic data has caused investors to. dial down their expectations.

Due this week are U.S. retail sales data and a U.S. producer prices rates.

Oil rates increased after the United States, according to. sources, rejected Russian President Vladimir Putin's recommendation. of a ceasefire in Ukraine. U.S. crude increased 95 cents to. settle at $77.87 a barrel, while Brent crude 64 cents to. $ 82.64.

Gold costs fell listed below the crucial $2,000 per ounce. level to a two-month low following the CPI information.

(source: Reuters)