Market News 13 FEB
Markets Closed Mixed After Inflation Data Release
On Wednesday, U.S. stock markets closed with mixed results. The S&P 500 ($SPX) lost 0.27%, the Dow Jones Industrial Average ($DOWI) fell by 0.50%, while the Nasdaq 100 ($IUXX) posted a gain of 0.12%. Market volatility was driven by unexpectedly high inflation data in the U.S., which influenced investor expectations regarding the Federal Reserve’s monetary policy.
Inflation Growth and Market Reaction
The January Consumer Price Index (CPI) rose 3.0% year-over-year, higher than December’s 2.9% and exceeding analysts’ expectations. The core CPI, which excludes food and energy, also increased to 3.3% compared to the expected 3.1%. These figures raised concerns that the Fed will maintain its tight monetary policy for a longer period.
Federal Reserve Chairman Jerome Powell noted that inflation data suggests the need to keep interest rates at current levels. This statement led to a rise in the 10-year Treasury yield to 4.658%, a 2.5-week high.
Corporate Earnings: Winners and Losers
The earnings season continues, and the market is experiencing significant stock movements based on financial reports:
Biogen (BIIB) fell more than 4% after releasing a weak forecast for 2025.
Waters (WAT) declined by more than 5% due to disappointing profit projections.
Lyft (LYFT) dropped 8% following weak booking forecasts.
Westinghouse Air Brake Technologies (WAB) fell over 8% due to lower-than-expected revenue projections.
CVS Health (CVS) surged over 14% after strong Q4 sales figures.
Intel (INTC) gained more than 7%, boosting semiconductor stocks.
Gilead Sciences (GILD) rose over 7% after posting strong earnings results.
Confluent (CFLT) soared by 25% on strong financial performance.
Bond Market Reaction and Global Markets
The 10-year Treasury yield increased by 9.6 basis points to 4.631%, while March Treasury futures fell to a 3.5-week low. Rising inflation expectations also impacted the bond market, with the 10-year breakeven inflation rate reaching a 23-month high of 2.525%.
Global markets painted a more optimistic picture. The European Euro Stoxx 50 index hit a 24-year high, gaining 0.27%. In Asia, China’s Shanghai Composite rose 0.85%, while Japan’s Nikkei 225 advanced by 0.42%.
Expectations for the Coming Days
For the remainder of the week, investors will focus on the release of the U.S. Producer Price Index (PPI), which is expected to decline to 3.3% from December’s 3.5%. Additionally, retail sales data is expected to show a 0.2% month-over-month decline.
The earnings season continues, with reports from Airbnb (ABNB), Applied Materials (AMAT), Palo Alto Networks (PANW), and other major companies scheduled for Thursday. These releases may set the tone for market movements in the coming trading sessions.
Inflation data and Fed policy expectations continue to pressure stock markets. Despite mixed index movements, investors remain cautious, awaiting further macroeconomic data. In the coming weeks, the market will closely watch for new signals from the Fed as well as corporate earnings, which could be key drivers for future price movements.