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The Dow Jones Industrial Average dropped 503 points, or 1.3%, the S&P 500 slid 1.4%, and the Nasdaq Composite fell 1.7%.
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| Wall Street Downturn Intensifies: Dow Plummets by 500 Points |
Wall Street Downturn
Stocks tumbled on Tuesday following higher-than-expected inflation data for January, causing a spike in Treasury yields and casting doubts on the Federal Reserve's ability to cut rates multiple times this year—a crucial element of the bull case for the equity market.
The consumer price index rose 0.3% in January, with a 3.1% increase on an annual basis—surpassing expectations. Core prices, excluding volatile food and energy components, rose 0.4% month over month and 3.9% from a year ago, exceeding projections.
Why is the Dow down 400 points today
Art Hogan, chief market strategist at B. Riley Financial, commented, "The CPI was, as reported today, just a touch hotter than expectations and proof positive that we're not on a linear path, but we're on a path headed lower."
The 2-year Treasury yield surpassed 4.6%, and the 10-year yield topped 4.27% after the CPI data. Tech shares, including Nvidia, Microsoft, and Amazon, faced losses in early trading. Amazon lost 3%, while Nvidia and Microsoft fell 2% each.
Wall Street, coming off a mixed session with record Dow closure and slight declines in the S&P 500 and Nasdaq, experiences a downturn. The market had been on a five-week winning streak.
In corporate developments, JetBlue Airways surged 12% as activist investor Carl Icahn disclosed a nearly 10% stake. Toymaker Hasbro dropped 2% after falling short of analyst expectations for Q4, and Avis Budget Group shares slipped 10% due to disappointing Q4 revenue.