Stocks rebounded from the day’s low levels in the final moments of Tuesday’s trading session, but the Dow Jones Industrial Average, S&P 500, and Nasdaq still experienced significant losses due to alarming January inflation data. Two companies that suffered significant declines in the stock market today were Shopify (SHOP) and Arista Networks (ANET), both of which saw their stock prices drop after reporting their earnings.
The Labor Department’s consumer price index revealed a 0.3% increase in prices, exceeding the expected 0.2% rise. The annual CPI rose to 3.1%, surpassing the projected 3%. The core CPI for January, which excludes food and energy, saw a 0.4% increase compared to the anticipated 0.3% rise. On an annual basis, prices climbed by 3.9%, exceeding the estimated 3.7%.
As a result of this data, the 10-year Treasury yield jumped by 14 basis points to nearly 4.31%, marking the highest level since December 1st. The likelihood of a rate cut in March fell to 8.5%, while it dropped to almost 31% for the May meeting following the release of the report, according to the Cboe FedWatch Tool.
Stocks felt the impact of this data as well. The Dow closed down by nearly 525 points, or 1.4%, on Tuesday, recovering from a drop of over 700 points earlier in the day. The S&P 500 also fell by 1.4%, pushing the index below the 5,000 level. The Nasdaq experienced a 1.8% decline, its worst performance since October 25th. Additionally, the Russell 2000, a small-cap index, dropped by 4% after rising by nearly 1.8% on Monday, ending the day below the 2,000 level.
Various exchange-traded funds, such as the Invesco QQQ Trust (QQQ) and the Innovator IBD 50 ETF (FFTY), also experienced declines in trading today. Overall, market volumes on both the New York Stock Exchange and the Nasdaq were higher compared to Monday.
Several companies experienced significant stock movements on Tuesday, including Affirm Holdings (AFRM), ZoomInfo Technologies (ZI), TransUnion (TRU), Ecolab (ECL), Medpace Holdings (MEDP), Howmet Aerospace (HWM), Marriott International (MAR), and others. These companies reported mixed earnings results, leading to a variety of stock price movements throughout the day.
Arm Holdings (ARM) saw its stock decline by 19.5% following recent price increases. Datadog (DDOG) experienced a 2.4% drop after reporting fourth-quarter earnings and revenue that exceeded estimates. Other companies such as Microsoft, Nvidia, Cadence Design Systems, and Lattice Semiconductor also saw changes in their stock prices.
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