US stocks slump on elevated CPI data, DOW loses 1.4%

The US stocks slumped yesterday, falling after recent surge as traders looked at the interest rate narrative in a different manner following a higher-than-expected consumer inflation reading. The surge in prices pushed back market expectations of imminent interest rate cuts, driving US Treasury yields higher. US Consumer Price Index rose by 3.1% for the 12 months ended in January, according to Bureau of Labor Statistics data released Tuesday. That marks a step back from December's 3.4% rate and a dramatic cooling from the 6.4% increase seen in January 2023.

The major averages climbed off their worst levels going into the close but recorded massive losses on the day. The Dow tumbled 524.63 points or 1.4 percent to 38,272.75, the Nasdaq plunged 286.95 points or 1.8 percent to 15,655.60 and the S&P 500 slumped 68.67 points or 1.4 percent to 4,953.17. The selling was broad based. Housing, steel, banking and telecom stocks turned sharply lower.

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