Stocks were mostly lower Wednesday as investor outlooks dimmed as consumer prices rose at a hotter-than-expected clip in January, raising concerns about higher-for-longer interest rates. The Dow Jones Industrial Average sank over 200 points and the S&P 500 Index lost about 0.3%, while the tech-heavy Nasdaq Composite ticked above the flatline.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Consumer Inflation rose at a more-than-expected rate in January, providing more evidence for the Federal Reserve to hold interest rates at their current rate to support the health of the U.S. economy.
Last month's consumer price index (CPI) accelerated at a seasonally adjusted 0.5% rate, the Bureau of Labor Statistics reported Wednesday, bringing the annual inflation rate to 3%. The annual rate was 0.1 percentage point higher than December's print.
Excluding food and energy prices, which tend to have more price volatility than other goods, core CPI rose 0.4% on the month in January and 3.3% annually. The annual core rate also rose 0.1 percentage point from December.
Fed Chair Jerome Powell said in testimony before the House Financial Services Committee on Wednesday that he would offer "a note of caution" about reading into the hot CPI report too much when it comes to policymaker's future decision on interest rates.
"We don't get excited about one or two good readings and we don't get excited about one or two bad readings," Powell said, adding that the central bank had made "great progress" on inflation from its cycle peak "but we're not quite there yet. So we want to keep policy restrictive for now.
President Donald Trump indicated in a social media post on Wednesday that interest rates "should be lowered," and are "something which would go hand in hand with upcoming Tariffs!!!"
On the Earnings Front:
CVS Health
During the quarter, CVS's insurance unit booked $32.96 billion in revenue, an increase of 23% year-over-year, but reported an adjusted operating loss of $439 million due to higher medical costs and the company's Medicare Advantage ratings. Moreover, Aetna's medical benefit ratio -- which measures the total medical expenses paid compared to premiums collected -- increased to 94.8% from 88.5% a year earlier; a lower ratio indicates higher profitability.
"Medical trends remain elevated, although what we experienced in the fourth quarter was less severe than what we assumed," CFO Thomas Cowey told analysts during the company's earnings call.
Super Micro Computer
The company expects to reach $40 billion in revenue for its fiscal 2026, but expects fiscal 2025 revenue to come between $23.5 billion to $25 billion -- down from its previous forecast of $26 billion and $30 billion. Super Micro Computer also expects to report net sales between $5.6 billion and $5.7 billion for the quarter ended Dec. 31.
In the News:
The New York Stock Exchange announced Wednesday that its electronic exchange NYSE Chicago will reincorporate in Texas, to be renamed NYSE Texas.
"As the state with the largest number of NYSE listings, representing over $3.7 trillion in market value for our community, Texas is a market leader in fostering a pro-business atmosphere," said Lynn Martin, president of NYSE Group, in a statement.
For Thursday:
Market participants will turn their attention towards another key inflation reading for January on Thursday, alongside notable earnings reports from companies including Robinhood Markets
