12/02 Indices, page-65

Wall Street stumbles over inflation rock

Feb 14, 202408:16 GMT+11

IXIC−1.80%SPX−1.37%DJT−2.62%RUT−3.96%
KEY POINTS:

• Main U.S. indexes tumble >1%, small cap Russell 2000 slides 4.0%
• All S&P 500 sectors decline: Cons disc weakest group
• Dollar, crude rise; gold, bitcoin drop
• U.S. 10-Year Treasury yield jumps to ~4.32%

WALL STREET STUMBLES OVER INFLATION ROCK
U.S. stocks took a dive on Tuesday after a robust CPI report showed inflation's meandering journey back down toward the Fed's target is taking longer than expected.
A broad sell-off sent all three major U.S. stock indexes sharply lower, with the tech-heavy Nasdaq IXIC suffering the largest percentage loss.
The benchmark S&P 500 SPX, having breached the 5,000 level only days earlier, suffered its largest one-day percentage plunge this month.
Economically sensitive transports DJT and small caps RUT were clear underperformers, ending the session down 2.6% and 4.0%, respectively.
The blue-chip Dow DJI saw it's steepest daily percentage plunge since March 22, 2023, and it was the RUT's biggest daily percentage drop since June 16, 2022.
None of the "Magnificent 7" momentum stocks were particularly magnificent, with Tesla TSLA, Microsoft MSFT and Amazon.com AMZN all shedding more than 2% by the closing bell.
And it's all the Labor Department's fault, for releasing a CPI report that showed inflation is cooling at a more glacial pace than the Fed - or markets - would prefer, dousing any remaining hopes that the central bank will cut its key policy rate any sooner than mid-year.
Financial markets are currently pricing in a 51.7% likelihood that the first rate cut will arrive in June.
Fourth quarter reporting season is approaching the home stretch, with 350 of the companies in the S&P 500 having reported. Four out of five of those companies' earnings beat analyst expectations, according to LSEG.
Attention now turns to the Commerce Department's retail sales report for January coming on Thursday, which is expected to show a monthly topline decline of 0.1%, with the core number decelerating to 0.3% growth from 0.8%