Inflation Concerns and Mixed Earnings Shake U.S. Markets

The S&P 500 slipped after a strong U.S. inflation report dashed hopes for rate cuts. CVS Health and Gilead Sciences rose on positive earnings, contrasting Nvidia and Amazon's declines. President Trump's tariffs add inflation worries. Investors reassess the Fed's rate path amid shifting economic signals.

The S&P 500 slid on Wednesday following a stronger-than-expected U.S. inflation report, fueling concerns that the Federal Reserve may hold off on rate cuts. Earnings reports presented a mixed picture, with CVS Health and Gilead Sciences rallying, while Nvidia and Amazon experienced downturns.

January saw the most significant increase in consumer prices in almost a year and a half, underscoring the Fed's reluctance to cut rates despite pressures. This spike in inflation comes amid President Donald Trump's push for tariffs, criticized by economists for their inflationary effects.

Investor expectations for future rate cuts dimmed, with interest rate futures indicating a lower probability of reductions than earlier. The stock market reflected this uncertainty, with the S&P 500 and Dow Jones both closing lower, while inflation data also affected treasury yields and market volatility.

(With inputs from agencies.)