Wall Street Stocks Slip on Inflation Data
Wall Street stocks mostly fell on Wednesday, February 12, following US inflation data that cast a shadow over the prospects for additional Federal Reserve interest rate cuts.
Inflation Data Raises Concerns
The consumer price index rose to 3.0 per cent in January from a year ago, above the 2.8 per cent projected by economists, sparking concerns about whether the Fed’s progress on bringing down prices was reversing.
Fed Chair’s Response
Fed chair Jerome Powell told a congressional panel that the figures reinforced the central bank’s recent cautious approach to interest rate cuts.
Market Reaction
The Dow Jones Industrial Average finished down 0.5 per cent at 44,368.56, while the S&P 500 lost 0.3 per cent at 6,051.97. However, the tech-rich Nasdaq Composite Index, which fell in the morning, finished with a modest gain at 19,649.95.
Market Analyst’s View
"Equities were a lot more resilient than I would have expected given the news we had this morning," said Jack Ablin of Cresset Capital.
Other Market News
Besides inflation, markets have also been on edge over President Trump’s tariff plans.
Company News
Among individual companies, CVS Health shot up 15 per cent following better-than-expected earnings. The pharmacy chain company projected higher profits in 2025 compared with last year. Gilead Sciences jumped 7.5 per cent after reporting results that beat expectations as it signalled it could launch its latest HIV prevention drug in the summer of 2025. However, Chevron fell 1.6 per cent after announcing it will cut 15 to 20 per cent of its workforce as part of a reorganisation to save money and position the oil giant for the long-term.
Conclusion
The mixed performance of the markets on Wednesday reflects the ongoing uncertainty and volatility in the global economy. While some companies reported positive results, others were impacted by the inflation data and other market factors.
Frequently Asked Questions
Q: What was the impact of the inflation data on the stock market?
A: The inflation data led to a decline in stock prices, with the Dow Jones Industrial Average and S&P 500 falling, but the Nasdaq Composite Index finishing with a modest gain.
Q: What did Fed Chair Jerome Powell say about the inflation data?
A: Powell told a congressional panel that the figures reinforced the central bank’s recent cautious approach to interest rate cuts.
Q: Which companies reported positive earnings results?
A: CVS Health and Gilead Sciences reported better-than-expected earnings, with CVS Health projecting higher profits in 2025 and Gilead Sciences announcing the potential launch of its latest HIV prevention drug in the summer of 2025.
