U.S. Stocks Decline Amid Surging Inflation Concerns

NEW YORK, Feb. 12, 2025 — U.S. stocks fell across the board on Wednesday following a stronger-than-expected inflation report, raising renewed concerns about the trajectory of interest rates for the rest of the year.

The Dow Jones Industrial Average dropped 0.5%, while the S&P 500 lost 0.2%. The Nasdaq Composite edged slightly higher, increasing less than 0.1%. These movements followed a trading session earlier in the week where the Dow had advanced and the Nasdaq had dipped.

Inflation in January increased for the fourth consecutive month, as the Consumer Price Index rose with its most significant jump since June. The core inflation rate, excluding volatile food and energy sectors, reached 3.3%. This data was released just before Federal Reserve Chair Jerome Powell presented a biannual update to Congress.

The report led to a significant rise in Treasury yields, with the 10-year Treasury yield climbing to 4.63%, up from 4.53% the previous day. “Investors had already altered their outlooks on potential interest rate cuts, and this report has intensified worries about persistent inflation,” said an analyst.

Technology stocks displayed mixed results on Wednesday. Nvidia, Microsoft, Alphabet, and Amazon dropped approximately 1%, while Meta Platforms, Broadcom, and Apple experienced gains. Tesla rebounded slightly, adding over 2% after a previous slide of more than 6%.

Super Micro Computer shares increased nearly 3% after the AI server maker provided an optimistic forecast, anticipating to resolve regulatory filing delays to avoid delisting from Nasdaq. CVS Health stocks surged over 15% following the release of robust earnings.

Among other notable stock movements, Alibaba Group’s U.S.-listed shares rose almost 5% after reports indicated a potential collaboration with Apple to incorporate AI features into its products in China.

Analysts anticipate that this partnership could enhance Apple’s market position in China and drive iPhone sales as it leverages Alibaba’s data for product personalization. Alibaba has gained over 60% in the past year, marking five consecutive days of gains.

Conversely, Lyft shares fell 7% as the ride-hailing company projected first-quarter bookings below analysts’ expectations amid ongoing pricing competition with Uber Technologies.

“Current market conditions remain challenging for Lyft, which lost its partnership with Delta Air Lines earlier this year,” JPMorgan analysts commented.

In the commodities market, Bitcoin traded around $97,500 following a recovery from a steep decline. Gold futures hovered around $2,925 per ounce after peaking at $2,965 earlier in the week. West Texas Intermediate crude oil futures decreased by more than 2%, settling at approximately $71.50 a barrel.

As the market digests these developments, the outlook is marked by growing concerns over inflation, prompting investors to reassess their strategies leading into the Fed’s policy decisions.