NEW YORK, Jan 12 — Wall Street stocks declined early today as markets weighed how the latest signs of moderating inflation will affect upcoming Federal Reserve interest rate decisions.
The consumer price index last month rose 6.5 per cent from a year ago, the smallest increase since October 2021 and the sixth straight month of easing.
Although generally positive, the report showed services inflation remained above the Fed’s target rate.
“The improvement is welcome news, but the Fed will still proceed cautiously as it monitors ‘sticky’ inflation components like core services,” said a note from FHN Financial’s Will Compernolle, who wrote that the report “locks in” expectations for a quarter per centage point interest rate hike in February when the Fed next meets.
About 20 minutes into trading, the Dow Jones Industrial Average was down 0.4 per cent at 33,843.56.
The broad-based S&P 500 fell 0.7 per cent to 3,942.17, while the tech-rich Nasdaq Composite Index dropped 1.1 per cent to 10,808.99.
Some analysts said anticipation of the better inflation data had lifted US equities the last two days.
American Airlines jumped 5.3 per cent as it lifted its earnings projections for fourth-quarter amid solid travel demand.
But KB Home fell 5.2 per cent as the company’s quarterly results lagged expectations. The homebuilder described current market conditions as “challenging” due to high mortgage rates and economic uncertainty. — AFP