Village Voice News

US equities decline due to inflation data

<p>US equities fell on Tuesday with the release of new data showing that inflation decreased somewhat but remained high in January.</p>
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This comes after CNN reported that the S&P 500 slightly declined from a record high on Monday, while the Dow Jones Industrial Average closed at a record high.</p>
<p>According to the article, the Dow fell 527 points, or 1.4%, the S&P 500 fell 1.4%, and the Nasdaq Composite fell 1.7%.</p>
<p>The US Bureau of Labor Statistics issued statistics on Tuesday that showed that for the 12 months that ended in January, prices increased by 3.1% as measured by the Consumer Price Index (CPI). The CPI increased by 0.3% on a monthly basis in the previous month.</p>
<p>Both statistics were more aggressive than anticipated. According to FactSet, CNN noted, economists had predicted that inflation would decrease to 0.2% starting in December and then gradually pick up to 2.9% yearly.</p>
<p>The CME FedWatch Tool indicates that traders now mostly anticipate the Federal Reserve to lower rates for the first time in June or July.</p>
<p>Greg Wilensky, head of US fixed income at Janus Henderson Investors, said in a note on Tuesday, “With this new data, a first cut in June seems like the most reasonable expectation unless we see a very quick, severe drop in labor market activity or a geopolitical shock,” CNN reported.</p>