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Forbes Media CEO Steve Forbes and Public Ventures President Lou Basenese react to stocks falling on a hotter-than-expected consumer price index.
U.S. stocks tumbled in a broad sell-off after a hotter-than-expected inflation report may jeopardize the Federal Reserve’s plan to cut interest rates.
The Dow Jones Industrial Average fell more than 600 points during intraday trading, or 1.7%, and is on pace for the worst session in 11 months.
The benchmark has erased almost half its gains for 2024 with the 10-year Treasury yield nearing 4.3%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 38067.91 | -729.47 | -1.88% |
The consumer price index for January rose by 3.1% on an annual basis, higher than the 2.9% economists surveyed by Refinitiv expected. The producer price index, due Wednesday, will also be closely watched.
CONSUMER INFLATION FOR JANUARY COMES IN HOT
“We continue to expect the FOMC to leave the Fed funds rate unchanged at the March meeting and to begin the easing cycle in May,” said Jan Hatzius, chief economist at Goldman Sachs, in a note to clients on Tuesday.
While over 91% of market participants agree with Hatzius, the majority, 62%, don’t expect any move at the May meeting, according to the CME’s Fed Watch Tool.
JANUARY INFLATION BREAKDOWN: WHERE PRICES ARE RISING THE MOST
Dow Jones Industrial Average
The S&P 500 and Nasdaq Composite slid 1.6% and 1.9%, respectively.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SP500 | S&P 500 | 4926.58 | -95.26 | -1.90% |
| I:COMP | NASDAQ COMPOSITE INDEX | 15585.679549 | -356.87 | -2.24% |
All 11 of the S&P’s major sectors fell, with real estate, utilities and financials pacing the drop, while energy and health care companies fell the least.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XLRE | SELECT SECTOR SPDR TRUST REAL ESTATE SELECT SECTOR S | 37.09 | -1.20 | -3.13% |
| XLU | UTILITIES SELECT SECTOR SPDR ETF | 59.60 | -1.39 | -2.28% |
| XLF | FINANCIAL SELECT SECTOR SPDR ETF | 39.26 | +0.18 | +0.46% |
| XLE | ENERGY SELECT SECTOR SPDR ETF | 84.23 | +0.92 | +1.10% |
| XLV | HEALTH CARE SELECT SECTOR SPDR ETF | 144.21 | +0.20 | +0.14% |
