US stocks ended the volatile session mixed after inflation fell less than expected

  • US stocks ended Tuesday’s choppy session on a mixed note.
  • Headline inflation fell to 6.2% in January, but the pace was higher than expected.
  • Monthly prices rose as the cost of food, housing and gas increased.

US equities ended Tuesday mixed as investors worried about how the Federal Reserve would interpret the January inflation report, which showed continued upward pressure on monthly prices.

The S&P 500 avoided a swinging session with a third straight win, but the Dow Jones Industrial Average fell and Coca-Cola was among daily dips.

The Department of Labor’s first report on consumer prices for 2023 showed the total down to 6.4% year-on-year from December, but the value was slightly higher than the Bloomberg consensus estimate of 6.2%.

Rising energy and food prices, as well as rents, pushed monthly growth to 0.5%. The core consumer price index, which does not take into account energy and food prices, rose 0.4% over the month.

Here’s where the US indices closed at 4:00 pm on Tuesday:

“The good news on the CPI is that inflation continues to decline as the year-on-year inflation rate declined for 7 straight months,” Eric Sterner, chief investment officer of Apollon Wealth Management, wrote in a note.

“The bad news is that inflation is still very high compared to normal levels. The Fed will have to remain hawkish and likely to raise rates at least two (maybe three) more times,” he said. “The road to normal inflation will be bumpy as energy and commodity prices should bounce back after China abandons its zero COVID policy.”

Investors are generally lowering their expectations that the Fed will start cutting rates later this year. The ninth consecutive rate increase is likely to occur in March.

Here’s what else is happening today:

In commodities, bonds and cryptocurrencies:

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