S&P 500 and Nasdaq Turn Lower After Consumer Price Inflation Accelerated in January

Barry Adams
12 Feb, 2025
New York City

Stock market indexes extended losses for the second consecutive session after investors reviewed the latest update on consumer price inflation. 

The S&P 500 index decreased 0.5%, and the Nasdaq Composite declined 0.7% after consumer price inflation was hotter than expected. 

Consumer price inflation accelerated to an annual pace of 3.0% in January from 2.9% in December, the U.S. Bureau of Labor Statistics reported Wednesday. 

On a monthly basis, January's consumer price index advanced 0.5%. 

Core inflation, which excludes food and energy prices, increased 0.4% from the previous month and advanced at an annual pace of 3.3%.

Consumer price inflation is largely driven by the sustained increase in shelter costs, which accounted for 30% of the increase, and advanced at a slower annual pace of 4.4% from 4.6% in the previous month.

Moreover, fuel prices rose at an annual pace of 1%, compared to a decline of 0.5% in December, and rose for the first time in six months. 

Investors are awaiting the release of producer price inflation later in the week. 

Federal Reserve Chairman Jerome Powell is set to deliver his comments to the House Committee on Financial Services, following his appearance before the Senate Banking Committee on Tuesday. 

On Tuesday, Fed Chair Powell confirmed that the U.S. economy is on solid footing and labor market conditions are favorable and strong, and the central bank is in no hurry to increase rates in the near future. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.6% to 6,028.01, the Nasdaq Composite edged down 0.8% to 19,546.01, and the Russell 2000 index was down 1.47% to 2,242.26.

The yield on 2-year Treasury notes edged higher to 4.37%, 10-year Treasury notes increased to 4.65%, and 30-year Treasury bonds advanced to 4.85%.

WTI crude oil decreased $1.12 to $72.18 a barrel, and natural gas prices edged higher by $0.04 to $3.56 a thermal unit.

Gold decreased by $8.96 to 2,890.23 an ounce, and silver edged up by $0.15 to $31.98.

The dollar index, which weighs the US currency against a basket of foreign currencies, increased 0.43 to 108.35 and traded at a two-year high.

 

U.S. Stock Movers 

CVS Health Corp. jumped 9.2% to $60.10 after the pharmacy chain operator's fourth quarter results surpassed market expectations. 

Super Micro Computer jumped 9.2% to $42.16 after the custom server builder said that the company is on track to file its delayed annual report by February 25. 

The company lowered its annual revenue estimate range to between $23.5 billion and $25 billion.

Upstart Holdings Inc. soared 20% to $81.10 after the consumer lending platform operator reported better-than-expected results in the fourth quarter. 

The company guided revenue in the first quarter to exceed $200 million, surpassing expectations of $195 million set by some analysts.

Marriott International declined 1% to $285.45 after the company reported weaker-than-expected earnings per share in the latest quarter.