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Stocks fall, dollar and yields gain after U.S. inflation information

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

The U.S. consumer rate index report enhanced expectations that the Federal Reserve will hold interest rates steady in March.

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

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

The Dow Jones Industrial Average fell 523.80 points,. or 1.35%, to 38,273.58; the S&P 500 lost 70.53 points, or. 1.40%, to 4,951.31; and the Nasdaq Composite lost 279.58. points, or 1.75%, to 15,662.96.

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

The MSCI world equity index, which tracks. shares in 49 countries, lost 1.21%. The Europe-wide Stoxx 600. index was last down 1.2%, having actually traded 0.47% lower. before the information.

The customer price index increased 0.3% last month after. getting 0.2% in December, the Labor Department's Bureau of Labor. Data said on Tuesday. Yearly modifications to the CPI data. published last Friday were blended, however normally revealed inflation. was on a downward trend after rising in 2022.

Financial experts polled had actually anticipated the CPI getting. 0.2% on the month and rising 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 walkings and begin. considering cuts.

The greenback surged to 150.58 yen, a three-month. peak. The dollar was last up 0.72% against the yen at 150.42,. while the euro was down 0.5% on the day at $1.0718.

The dollar index, which tracks the greenback against. A basket of currencies of other major trading partners. touched a three-month high after the information, and was last up 0.5%. at 104.68.

The yield on benchmark 10-year Treasury notes. increased to 4.2691% compared to its U.S. close of 4.17% on Monday.

Investors 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 information.

They saw a 40% opportunity of the first cut visiting May,. compared to 71% formerly, according to money market prices.

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

U.S. crude ticked up 0.82% to $77.55 a barrel. Brent. crude rose to $82.57 per barrel.

Area gold costs fell 0.97% to $2,000.19 an ounce.

(source: Reuters)