Posted on 02/13/24
| News Source: FOX Business
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%.
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.
"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.
The S&P 500 and Nasdaq Composite slid 1.6% and 1.9%, respectively.