Dow falls 700 points after inflation cools less than anticipated

NEW YORK (February 13) US stocks tumbled on Tuesday, plunging from recent highs as investors digested a hotter-than-expected January inflation report that showed prices cooling slower than forecasts anticipated.

All three major indices sank roughly 2% on the heels of the report.

The Dow Jones Industrial Average (^DJI) fell 1.8%, or around 700 points, while the S&P 500 (^GSPC) also dropped nearly 2%, after the benchmark faltered Monday in its bid to keep its historic rally above 5,000 going.

The tech-heavy Nasdaq Composite (^IXIC) led the day's sharp declines, plummeting more than 2% by late afternoon trading.

When removing the volatile food and energy categories, Tuesday's Consumer Price Index (CPI) release showed "core" prices increased 0.4% in January, their largest monthly gain since April 2023. On a headline basis, prices increased 3.1%, above economist estimates but a deceleration from a 3.4% annual gain in December.

In other markets, the price of bitcoin (BTC-USD) hovered below $50,000 after the leading cryptocurrency hit the closely watched level for the first time since 2021, seen as a remarkable comeback.

Yahoo News