NEW YORK (AP) – Most US stocks fell on Wednesday. The worsening of Americans.
The S&P 500 fell 0.3%, but was on track as the 1.1% decline was much worse when trading began. The Dow Jones industrial average sunk 225 points (0.5%), while Nasdaq composites rose below 0.1%.
Stocks saved losses throughout the day as oil prices eased. Benchmark US crude barrels fell 2.7% below $72 President Donald Trump He said he agreed to start with the Russian president. “Negotiations” to end the war in Ukraine. Such a move could free up the global movement of crude oil.
Still, Wall Street’s overall momentum remains downward, with most of its inventory dropping. Treasury yields are also significantly higher in the bond market, closing pressure on financial markets after consumers say they have to pay Higher price for egggasoline and other living expenses were more predicted than economists.
Overall inflation among US consumers in January was 3%. This was worse than the 2.9% inflation rate in December.
The inflation report not only shows that the budgets of US households are amplifying, but Wall Street traders were right Make predictions Federal Reserve System There is a smaller delivery Low interest rates save Americans this year.
Inflationary mental worries are low in stocks.
The Fed has sharply cut its major interest rates from September Until the end of last year, the company aims to make borrowing cheaper, support the economy, and raise the prices of stocks, bonds and other investments. However, the Fed warned at the end of 2024 that it would not be able to cut interest rates due to concerns in 2025. inflation Stubbornly expensive. The goal is to keep inflation at 2%, with lower rates allowing more fuel to inflation.
Some investors were betting on not cutting the Fed at all in 2025, even before Wednesday’s report on the Consumer Price Index or CPI.
“The expected CPI confirms investors’ fears about inflation that are too enthusiastic about keeping the Fed on the sidelines,” said Sameer Samana, head of global equity and real assets at Wells Fargo Investment Institute. It states.
And January’s reading doesn’t explain any of the tariffs Trump has Recently announcedand Probably more in the middle Which economists expect Will? Increases the prices of imported goods Even further away. The tariffs “will give us a sense of the impact later this year,” Samana said.
Following the disappointing inflation data in January, traders are betting on a 29% chance that the Fed won’t cut interest rates at all this year. Data from CME Group. This is up from the below 20% chances seen the previous day.
Such expectations sent the 10-year Treasury yield from 4.54% in the second half of Tuesday to a maximum of 4.62%. This is a prominent move for the bond market.
If the 10-year Treasury, considered one of the safest investments possible, is paying a lot of interest, investors are less likely to pay a high price for the stock, and the price is zero. There is a greater risk of seeing it. This puts downward pressure on US stocks that critics say look already expensive after running their records last year.
One of the few ways companies have to counter this downward pressure on stock prices is to bring about stronger profits.
Gilead Sciences did just that, and its inventory rose 7.5% after the pharmaceutical company smashed profit expectations for the most recent quarter. I believed in the strength of HIV products.
CVS Health It jumped 14.9% after easily surpassing Wall Street’s revenue and profit expectations in the latest quarter.
However, topping profit forecasts are not always sufficient. The ride app Lyft fell 7.9% despite reporting stronger revenue than expected. Lyft’s revenue for the last three months of 2024 was slightly below analysts’ forecasts.
Home builders and other businesses that can feel pain Mortgage fees The Fed staying high while pending has also become heavier in the market. Home Depot fell 2.2%, Builders FirstSource fell 3.5%, and Lennar fell 2.7%.
Exxon Mobil sank 3% to $75.18 as oil and gas companies continued to drop by 2.4% in the international standard Brent Crude barrel price.
Frontier Group Holdings, the parent company of Frontier Airlines, has since lost 4.9%. Spirit Airlines rejected its third purchase bid From budget rivals. Spirit said it will focus on its own plan to step out of protections from US bankruptcy courts and stabilize its finances.
The S&P 500 fell 16.53 points to 6,051.97. The Dow Jones industrial average fell from 225.09 to 44,368.56, while the Nasdaq composite was added to 19,649.95 on 6.09.
In the overseas stock market, the indexes were mostly high in Europe and most of Asia.
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AP business writers Matt Ott and Yuri Kageyama contributed.
