US close: Stocks fall as inflation fears hit sentiment

US stocks finished mostly lower on Wednesday after an unexpected acceleration in core inflation spooked markets, causing bond yields to rise strongly.

“Hotter-than-expected inflation has given investors something new to fret about, with the data presenting the Federal Reserve with less of a reason to cut interest rates any time soon,” says Dan Coatsworth, investment analyst at AJ Bell.

The Dow and S&P 500 fell 0.5% and 0.3%, respectively, while the Nasdaq was little changed by the close.

According to data from the Bureau of Labor Statistics, the annual rate of US consumer price inflation rose to 3% in January, surprising economists who had expected no change from 2.9% the previous month, highlighting persistent inflationary pressures across the economy.

Core inflation, which excludes food and energy prices, unexpectedly increased to 3.3% from 3.2% in December, whereas analysts had pencilled in a decline to 3.1%.

“The inflation figures mean that cost-of-living pressures are returning, even before Donald Trump has had time to enforce policies that could drive inflation even higher," AJ Bell's Coatsworth said.

The yield on a 10-year US Treasury note was up 9.7 basis points at 4.629% – its highest in three weeks. The dollar initially jumped following the inflation data, but had pared gains by the close with the greenback index finishing flat at 107.98.

Elsewhere on the macro front, mortgage applications increased 2.3% in the week ended 7 February, according to the Mortgage Bankers Association of America, with applications to purchase a home falling 2% week-on-week and applications to refinance a mortgage soaring 10%.

Market movers

Shares in Kraft Heinz fell sharply after the food conglomerate said profit would be below forecasts and missed quarterly sales estimates on the back of weak demand price rises. The company said it expects fiscal 2025 adjusted earnings per share to be $2.63 - $2.74, compared with analysts' average estimates of $3.04.

Pharmacy chain CVS rallied thanks to fourth-quarter results that came in ahead of expectations on the Street, with revenues hitting $97.71bn and earnings per share of $1.19, beating the $97.1bn and 93 cents forecasts, respectively.

In other news, ride-share group Lyft, car rental outfit Avis Budget and property marketplace Zillow all tumbled after disappointing investors with quarterly updates; while fintech Upstart Holdings and food delivery firm DoorDash were rising strongly after their latest figures.

Dow Jones - Risers

Intel Corp. (INTC) $22.48 10.69%
Boeing Co. (BA) $186.25 3.22%
Apple Inc. (AAPL) $236.87 2.78%
Amgen Inc. (AMGN) $295.06 2.02%
Coca-Cola Co. (KO) $68.71 1.64%
Nike Inc. (NKE) $72.26 1.29%
Walmart Inc. (WMT) $103.61 1.11%
Salesforce.Com Inc. (CRM) $326.12 0.53%
International Business Machines Corporation (CDI) (IBM) $255.81 0.44%
Goldman Sachs Group Inc. (GS) $649.00 0.27%

Dow Jones - Fallers

Walgreens Boots Alliance, Inc. (WBA) $9.47 -3.17%
Caterpillar Inc. (CAT) $351.73 -2.81%
Home Depot Inc. (HD) $407.14 -2.21%
Chevron Corp. (CVX) $154.87 -1.61%
Unitedhealth Group Inc. (UNH) $527.40 -1.22%
American Express Co. (AXP) $306.40 -1.02%
Merck & Co. Inc. (MRK) $85.67 -1.01%
Dow Chemical Co. (DOW) $38.31 -0.96%
McDonald's Corp. (MCD) $307.37 -0.84%
3M Co. (MMM) $148.86 -0.80%

S&P 500 - Risers

CVS Health Corp (CVS) $63.22 14.95%
Nektar Therapeutics (NKTR) $0.73 10.76%
Intel Corp. (INTC) $22.48 10.69%
Gilead Sciences Inc. (GILD) $103.31 8.21%
Edwards Lifesciences Corp. (EW) $75.80 6.92%
Tapestry Inc. (TPR) $85.10 4.63%
Microchip Technology Inc. (MCHP) $53.85 3.73%
Mondelez International Inc. (MDLZ) $60.60 3.69%
Edison International (EIX) $52.68 3.68%
CME Group Inc. (CME) $248.96 3.46%

S&P 500 - Fallers

Wabtec Corp. (WAB) $189.34 -9.06%
Coty Inc. Class A (COTY) $5.68 -7.49%
Ipg Photonics Corp. (IPGP) $62.97 -6.78%
Arista Networks Inc. (ANET) $109.64 -6.16%
Waters Corp. (WAT) $382.25 -5.77%
Apache Corp. (APA) $22.37 -5.13%
Cincinnati Financial Corp. (CINF) $133.67 -4.87%
HF Sinclair Corporation (DINO) $35.99 -4.79%
Biogen Inc (BIIB) $133.43 -4.79%
CF Industries Holdings Inc. (CF) $81.15 -4.58%

Nasdaq 100 - Risers

Intel Corp. (INTC) $22.48 10.69%
Gilead Sciences Inc. (GILD) $103.31 8.21%
NetEase Inc. Ads (NTES) $109.14 4.89%
Biomarin Pharmaceutical Inc. (BMRN) $65.86 4.59%
Baidu Inc. (BIDU) $93.34 4.53%
Trip.com Group Limited (TCOM) $68.06 4.47%
Microchip Technology Inc. (MCHP) $53.85 3.73%
Mondelez International Inc. (MDLZ) $60.60 3.69%
Charter Communications Inc. (CHTR) $354.56 3.39%
Booking Holdings Inc. (BKNG) $5,018.11 2.94%

Nasdaq 100 - Fallers

Biogen Inc (BIIB) $133.43 -4.79%
Workday, Inc. (WDAY) $257.92 -3.58%
JD.com, Inc. (JD) $39.31 -3.49%
Synopsys Inc. (SNPS) $509.71 -3.47%
Walgreens Boots Alliance, Inc. (WBA) $9.47 -3.17%
Western Digital Corp. (WDC) $67.28 -3.03%
Micron Technology Inc. (MU) $91.68 -2.90%
Tesla Inc (TSLA) $336.51 -2.87%
Align Technology Inc. (ALGN) $205.34 -2.77%
Hologic Inc. (HOLX) $63.53 -2.64%