Stocks moved back and forth in volatile trading on Tuesday as market participants reacted to January's hotter-than-expected inflation report and weighed how it will impact the Federal Reserve's next moves forward. The Dow Jones Industrial Average fell over 150 points, while the S&P 500 Index closed at a negative flatline and the Nasdaq Composite rose 0.6%.
Here's how the market settled on Tuesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In the spotlight on Tuesday, the consumer price index (CPI) rose slightly more than expected last month due to rising shelter and energy prices. The index rose 0.5% month-over-month to an annual gain of 6.4%, according to the Bureau of Labor Statistics. That exceeded Dow Jones analyst estimates for a monthly increase of 0.4% and annual gain of 6.2%.
Core CPI, which excludes more volatile food and energy prices, also increased 0.4% monthly and 5.6% form a year ago, also topping estimates for gains of 0.3% and 5.5%, respectively.
Moreover, December's CPI was also reversed to show a monthly increase of 0.1%, instead of a 0.1% decline.
Stubbornly high inflation dashed some hopes that the Federal Reserve will change its interest rate hiking campaign in the near-term in response to signs inflation is easing in some parts of the economy. Still, as the labor market remains tight and key inflation readings continue to top expectations, many market participants are preparing for rates to remain high as the central bank works to stabilize prices.
On the brighter-side, Goldman Sachs
"I think it's going to be, you know, a twisty, turn-y kind of road to navigate through this and get ot the other side, but I think the chance of a safter landing feels better now than it felt six to nine months ago," Solomon said at a conference hosted by Credit Suisse
On the earnings front, Palantir Technologies
"When we were just starting out, many doubted our ability to evolve beyond anything more than a specialty provider of software to a handful of government customers, let alone generate meaningful revue from the government sector as a whole," CEO Alex Karp wrote in a letter to shareholders. "They were wrong."
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