Investors greeted the latest inflation data in the US with pessimism. In January 2024, US CPI fell three-tenths to 3.1%However, the underlying index, which excludes the most volatile prices such as food and energy prices, remained unchanged at 3.9%. In the markets, inflation was expected to be 2.9%, which would be the beginning of the first interest rate cut by the US Federal Reserve (Fed). This decision will now have to wait. The S&P 500 lost 1.37% and the Dow Jones lost 1.35%.. HE Nasdaqtechnology stock index, It was the most affected with a decrease of 1.8%. Due to this disaster, the S&P 500 index lost 5,000 points; this reached an all-time high just four days ago.
From the early stages of the trading day, US stock markets reacted poorly. 11 minutes after the opening of the trading floor, Dow Jones was at 38,378 points, while the S&P 500 index fell by 1.29% to 4,956 points. Nasdaq, on the other hand, decreased by 1.85% to 15,647 units. The inflation data was not well received in the market, as it was higher than analysts expected and Treasury bill yields rose to 4.261%.
A week ago, Fed Chairman Jerome Powell, in an interview with the CBS News program ‘Sixty Minutes’, stated that it was necessary to act “cautiously” regarding the prediction of lowering interest rates, which are currently in the 5.25% range. -5.5%. At the time, although the central bank was still holding out, it emphasized the strength of the country’s labor market and economy, as well as the robustness of growth. Continues to return inflation to 2% target. Powell said that “almost all” of the 19 members of the Federal Open Market Committee, which is responsible for deciding whether to raise interest rates, “believe that raising the interest rate would be appropriate in the most likely case.” “this year.” “. And, in his words, it is unlikely that this committee will reach that level of confidence at its March meeting. With the latest inflation data available, it is possible that interest rate cuts will not be seen until the summer, a date close to that managed by his euro zone counterpart Christine Lagarde.
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In other news, this morning the American beverage company Coca-Cola announced its results In 2023, it made a profit of 10 billion 714 million dollars, an increase of 12 percent compared to the previous year. Its shares rose by 1.19% at the stock market opening.
Moreover, airline JetBlue Airways up 10% Toy maker Hasbro fell nearly 3% at the opening after its quarterly results fell short of expectations, analysts said, after activist investor Carl Icahn announced he had purchased a nearly 10% stake in the company.