Traders work on the floor of the New York Stock Exchange in New York on Feb. 3, 2025.
Angela Weiss | Afp | Getty Images
Stocks tumbled and interest rates spiked Wednesday after consumer prices rose more than expected in January, raising concern that inflation may reignite.
The Dow Jones Industrial Average tumbled 336 points, or 0.7%. The S&P 500 shed 0.5%, while the Nasdaq Composite dipped 0.3%.
“The hotter than expected CPI confirms investors’ anxiety regarding too-hot inflation that will keep the Fed on the sidelines (as opposed to cutting rates),” Sameer Samana, Wells Fargo Investment Institute head of global equities and real assets, said. “While risk markets can go higher, it will be a choppier trajectory than the last two years.”
A broad sell-off occurred during the trading day after January’s consumer price index jumped 0.5% for the month, putting the annual inflation rate at 3%. Both were more than the 0.3% and 2.9% increases expected by economists polled by Dow Jones. Excluding volatile food and energy prices, core CPI rose 0.4% on the month and 3.3% for the past 12 months, both higher than expected.
The 10-year Treasury yield, a benchmark for mortgages, auto loans and credit cards, jumped to 4.66% from 4.54% on Tuesday.
Shares of most mega-cap technology stocks, including Amazon, Microsoft and Alphabet, declined. Consumer shares and bank stocks at risk of slower spending and a weaker economy also retreated. Tesla bucked the trend and gained more than 2%, meanwhile. Intel and Palantir also traded higher, helping curb losses. CVS Health shares popped more than 14% on a major fourth-quarter earnings beat.
The latest inflation data makes it less likely the Fed will resume its rate-cutting campaign anytime soon and now raises concern perhaps the next move could even be a hike.
Federal Reserve Chair Jerome Powell testified before the House Committee on Financial Services on Wednesday and said the latest CPI data is a reminder that the Fed has made “great progress” towards bringing inflation closer to its 2% target but that it is “not quite there yet.”
“We want to keep policy restrictive for now,” he said before lawmakers in his second appearance on Capitol Hill this week. Powell’s comments follow his Tuesday testimony to the Senate Banking Committee, during which he said the Fed was in no hurry to make further interest rate cuts.
President Donald Trump said Wednesday morning before the CPI data was released that interest rates should be lowered.
Kraft Heinz shares tumble 4% as investors fret there’s no easy fix to its weak sales
Kraft Heinz shares fell 4% to a fresh 52-week low after the food company warned fiscal 2025 earnings would fall short of analyst estimates. The maker of Ore-Ida fries and Philadelphia cream cheese expects its organic sales will be flat to down this year.
Even worse, there’s risk of further downside because the forecast doesn’t account for any potential hits from tariffs, the worsening of the economy or reductions in SNAP benefits — all of which could make it more challenging to deliver its results. Kraft Heinz has been hurt by shoppers trading down to private label products in the face of high inflation. The company expects it will need to adjust price gaps to help improve the peformance of key brands such as Capri Sun. In some cases, prices will be lowered permanently rather than done through temporary promotions. Kraft Heinz CFO Andre Maciel said there wasn’t “a silver bullet” to jumpstart sales.
—Christina Cheddar Berk
Powell indicates that Trump call for lower rates won’t influence policy
U.S. Federal Reserve Chair Jerome Powell testifies before a House Financial Services Committee hearing on “The Semiannual Monetary Policy Report to the Congress,” on Capitol Hill in Washington, D.C., U.S., February 12, 2025.
Nathan Howard | Reuters
Fed Chair Jerome Powell said Wednesday that interest rate decisions won’t be based on political pressure, even if that’s coming from President Donald Trump.
Asked about comments Wednesday morning from the president in which he called for lower rates, Powell said, “It’s a practice to never comment on anything the president says, but I think people can be confident that we’ll continue to keep our heads down, do our work, make our decisions based on what’s happening in the economy.”
The response came during questioning in front of the House Financial Services Committee, where Powell was appearing as part of his semiannual testimony on monetary policy. Asked whether statements from elected officials “are not among the things that cause you to act one way or the other,” the chair responded, “That’s correct.”
—Jeff Cox
Charles Schwab expands ’24/5′ trading to all clients
All Charles Schwab customers can now trade certain stocks and funds 24 hours a day during the business week, the financial firm said Wednesday.
The move follows a series of pilot rollouts for the “24/5” program that Charles Schwab called “successful.” All stocks in the S&P 500 and Nasdaq 100, as well as hundreds of exchange-traded funds, are now available to trade for Charles Schwab users overnight.
The company said extended-hour trading will not take place on official market holidays or days when exchanges close early. During the pilot, Charles Schwab said that the hours between 8 p.m. and 9 p.m. ET and 3 a.m. and 4 a.m. ET were the most popular.
— Alex Harring
Stocks open lower on Wednesday
CVS, Super Micro among the names making moves before the bell
Omar Marques | Lightrocket | Getty Images
Check out some of the stocks that are making big moves in the premarket:
- CVS – Shares jumped more than 8% after the pharmacy operator reported fourth-quarter results that beat analyst expectations. The company earned an adjusted $1.19 per share on revenue of $97.71 billion. Analysts polled by LSEG expected a profit of 93 cents per share on revenue of $97.19 billion. Full-year earnings guidance, meanwhile, was in line with analyst expectations.
- Super Micro Computer – The server builder surged more than 10% despite cutting its fiscal 2025 full-year revenue forecast. Super Micro now expects revenue for the period to come in between $23.5 billion and $25 billion, while analysts were calling for $24.92 billion, per LSEG. The company’s CEO, Charles Liang, also said he’s “confident” the company will be able to file its delayed annual report by the Feb. 25 deadline.
- Upstart Holdings – Shares of the consumer lending platform gained more than 26% after its first-quarter guidance was stronger than expected. Upstart expects revenue of $200 million for the current quarter, more than the $193.8 million that analysts had penciled in, according to LSEG. Upstart’s fourth-quarter earnings and revenue also beat analysts’ expectations.
Read here for the full list.
— Sean Conlon
Consumer prices rise more than expected in January
The latest consumer inflation report came in hotter than expected, raising questions over how much will the Federal Reserve be able to lower rates going forward.
The consumer price index rose 0.5% in January month over month, while rising 3% year on year. Economists polled by Dow Jones expected CPI to increase 0.3% month over month and 2.9% year over year.
Core CPI, which strips out volatile food and energy price, advanced 0.4%, also more than expected.
— Fred Imbert
CVS pops on big earnings beat
CVS shares jumped more than 8% after the pharmacy operator reported fourth-quarter results that beat analyst expectations.
The company earned an adjusted $1.19 per share on revenue of $97.71 billion. Analysts polled by LSEG expected a profit of 93 cents per share on revenue of $97.19 billion. Full-year earnings guidance, meanwhile, was in line with analyst expectations.
CVS pops
— Fred Imbert
Goldman Sachs downgrades On Holding
Goldman Sachs is stepping to the sidelines on Swiss-based running apparel company On Holding.
Analyst Richard Edwards downgraded shares to neutral from buy, citing the stock’s full valuation. Over the last 12 months, the stock has soared nearly 80%. Edwards maintained his price target of $57 per share, which is 5.6% above Tuesday’s close price.
“We expect On’s brand momentum to remain robust over the medium term,” Edwards wrote in a research note on Tuesday.
However, U.S. credit card growth points to below-consensus growth in the fourth quarter for direct to consumer businesses, he added.
“While this data is U.S. specific and we do not expect a miss to consensus expectations for On, we note that sportswear companies that have missed expectations such as Nike, Puma and Deckers have seen significant share price declines recently,” Edwards added.
Furthermore, competition in the running segment has strengthened, per Edwards.
U.S.-traded shares fell 3% Wednesday during premarket trading.
On Holdings shares on Wednesday
— Hakyung Kim
Asia-Pacific markets mostly rise as investors assess Trump tariff impact
Gantry cranes stand near a cargo ship at Yangshan Port outside of Shanghai, China, February 7, 2025.
Go Nakamura | Reuters
Asia-Pacific markets mostly rose Wednesday as investors digested U.S. President Donald Trump’s tariff impact on regional economies.
Japan’s Nikkei 225 rose 0.42% to close at 38,963.70 after resuming trading following a holiday.
SoftBank Group’s third-quarter earnings fell short of analyst expectations as investments under its Vision Funds fell into the red. The company posted a surprise net loss of 369.17 billion yen ($2.4 billion), while LSEG had estimated a profit of 298.53 billion yen.
The Topix closed flat at 2,733.33. South Korea’s Kospi added 0.37% to end the day at 2,548.39, while the small-cap Kosdaq fell 0.59% to close at 745.18.
Hong Kong’s Hang Seng Index was up 2.41% in its final hour of trade. Mainland China’s CSI 300 added 0.95% to close at 3,919.86.
India is slated to report its inflation data for January.
The benchmark Nifty 50 was up 0.19%, while the BSE Sensex index was flat as at 1.30 p.m. local time.
Australia’s S&P/ASX 200 ended the day up 0.6% at 8,535.30.
— Amala Balakrishner
Orange juice futures extend losing streak
Cartons of orange juice are displayed for sale in a grocery store on September 28, 2023 in Los Angeles, California.
Mario Tama | Getty Images
Orange juice futures (MAR) were lower again Tuesday, marking their eighth consecutive negative session. OJ hit a low of 385.50 cents per pound, its lowest level since May 9, 2024. This pullback comes despite futures reaching all-time highs in mid-December.
Market observers are surprised by the recent downturn, given ongoing supply constraints in Florida and Brazil. On Tuesday, the USDA revised its Florida orange production forecast downward to 11.5 million boxes—4% lower than the previous estimate and a 36% drop from last season.
Three key factors may be driving the decline, according to Danny Munch, an economist at the American Farm Bureau Federation:
First, orange juice prices have risen so high that consumers and food manufacturers may be shifting to alternatives, a classic case of demand destruction. This trend is exacerbated by growing concerns around sugar content in food and beverages.
Second, traders may believe that prices have peaked and production will eventually rebound. With OJ futures still well above five- and ten-year averages, investors could be taking profits, adding to the selling pressure.
Lastly, a strong dollar and potential tariff concerns make imported orange juice relatively cheaper. This currency effect could be softening price pressures despite supply tightness.
—Nick Wells
Stocks making the biggest moves after hours
Check out some of the companies making headlines in extended trading:
- DoorDash — The food delivery stock traded nearly 6% higher after better-than-expected revenue for the fourth quarter. DoorDash reported revenue of $2.87 billion in its most recent quarter, while analysts surveyed by LSEG forecast $2.84 billion.
- Gilead Sciences — The biopharmaceutical stock advanced 4% after fourth-quarter results surpassed analysts’ estimates on the top and bottom lines. Gilead notched adjusted earnings per share of $1.90 on revenue of $7.57 billion. Analysts polled by LSEG were looking for earnings of $1.70 per share on revenue of $7.14 billion.
- Super Micro Computer — The server builder popped more than 4% even as the company slashed its fiscal 2025 full-year revenue guidance. Super Micro now sees full-year revenue ranging between $23.5 billion and $25 billion, while analysts polled by LSEG called for $24.92 billion. The company also said it thinks it will be able to file its delayed annual report by Feb. 25.
Read the full list here.
— Brian Evans
Stock futures open little changed
Stock futures were little changed on Tuesday as investors look toward the January consumer price index report.
Futures tied to the Dow Jones Industrial Average ticked down 7 points, or 0.02%. S&P 500 futures slipped 0.02%, while Nasdaq 100 futures were 0.05% higher.
— Brian Evans