Wall Street found itself in the throws of one of the most tumultuous sessions since the start of the year. Stocks staggered under the weight of a blistering inflation report that rode in like a tempest.
In January, the Consumer Price Index (CPI) galloped at a 3.1% annual rate; a hair lower than December’s 3.4% but outpacing the anticipated 2.9%. Meanwhile, the core inflation, a metric that excludes energy and food prices, stubbornly held at 3.9%, defying expectations for a retreat to 3.7%. Monthly gyrations surpassed projections, causing reverberations in interest rate prognostications.
Traders swiftly jettisoned their positions, revising their expectations for 2024’s rate cuts. March’s chance of descent is now completely off the table, with the probability of the initial cut plastered at 76% by June, nearly fully priced by July. The expected tally of rate cuts for 2024 decreased to four, a significant drop from the almost six projected just weeks back.
The 2-year yield leaped by 15 basis points to 4.60%, and the 10-year yield by 10 basis points to 4.29%. The widely-followed iShares 20+ Year Treasury Bond ETF TLT skidded 1.3%, descending to lows not witnessed since early December 2023.
Almost every major asset, with the exception of the U.S. dollar, suffered on Tuesday. Volatility shot up once more, as the CBOE Volatility Index or VIX rocketed by 8%. Small-cap stocks bore the brunt, with the iShares Russell 2000 ETF IWM plummeting over 3%.
Bitcoin BTC/USD stumbled by 1.5% after surging to $50,300 overnight, while gold, tracked by the SPDR Gold Trust GLD, slipped below $2,000 an ounce for the first time in two months.
The Day’s Performance In Major Indices and ETFs
| Major Indices & ETFs | Price | % |
| S&P 500 | 4,953.69 | -1.4% |
| Dow Jones | 38,218.67 | -1.5% |
| Nasdaq 100 | 17,611.80 | -1.5% |
| Russell 2000 | 1,944.94 | -3.5% |
| CBOE VIX | 15.05 | 8.0% |
The SPDR S&P 500 ETF Trust SPY trembled 1.4% lower to $493.76, the SPDR Dow Jones Industrial Average DIA stumbled 1.5% to $382.25 and the tech-heavy Invesco QQQ Trust QQQ tumbled 1.6% to $436.72, according to Benzinga Pro data.
Not a single one of the eleven sectors comprising the S&P 500 saw gains on Tuesday. The Real Estate SPDR Select Sector Fund XLRE recorded the most substantial descent, plunging by 2.7%, closely tailgated by the Utilities SPDR Select Sector Fund XLU, down 2.2%.
Sector-wise, gold miners, monitored through the VanEck Gold Miners ETF GDX, and solar stocks, tracked by the Invesco Solar ETF TAN, languished with declines of 5.5% and 5%, respectively.
Noteworthy Stock Movements on Tuesday
- Biogen Inc. BIIB somersaulted 7.5% after the company missed both earnings and revenue estimates last quarter.
- SSR Mining Inc. SSRM nosedived 60%, marking the worst performance among Russell 1000 stocks, due to the suspension of operations at a mine in Turkey.
- Other companies reacting to earnings were Waste Management Inc. WM, Coca-Cola Company KO, down 1.7%, Moody’s Corp. MCO, down 7.6%, Marriot International MAR, down 6.3%, Zoetis Inc. ZTS, down 6%, Ecolab Inc. ECL, up 8.8%, Datadog Inc. DDOG, down 4.3%.
- Companies reporting after the closing bell are Airbnb Inc. ABNB, American International Group Inc. AIG, Welltower Inc. WELL.
Read now: Economists Sound Alarm On Inflation’s Stubborn Grip: ‘No Chance Inflation Will Return To 2%’ Without New Rate Hikes
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