US stocks dive at opening as inflation comes in above estimates

By Ovunc Kutlu

ISTANBUL (AA) - US stocks dove at the opening Tuesday as inflation figures in January were above expectations.

The Dow Jones fell 476 points, or 1.23%, to 38,320 at 9.55 a.m. EDT. The S&P 500 was down 66 points, or 1.33%, to 4,955.

The Nasdaq, meanwhile, plummeted 270 points, or 1.7%, to 15,671.

Annual consumer inflation in the US came in at 3.1% in January, slowing from a 3.4% gain in December, but it was higher than estimates of 2.9%.

The consumer price index (CPI) rose 0.3% in January, compared to the previous month, while expectations was for it to show a gain of 0.2%, according to the Labor Department's Bureau of Labor Statistics figures that were released earlier.

Core CPI, which excludes volatile food and energy prices, gained 0.4% in January from the previous month, higher than estimates of 0.3%,

Annually, core CPI climbed 3.9% in January, also higher than expectations of 3.7%.

Inflation figures coming in higher than market expectations could delay the US Federal Reserve's first rate cut later this year.

The probability of a rate cut of 25 basis points at the Fed’s March meeting stood at just 6.5% at 9.59 a.m. EDT, according to the FedWatch Tool provided by the US-based Chicago Mercantile Exchange Group.

The probability of a cut of 25 basis points in the May meeting was 36.9%, and at 54.1% for the June meeting.

The VIX volatility index, also known as the fear index, jumped 6.1% to 14.78, while the 10-year US Treasury yield rose 2.5% to 4.279%.

The dollar index increased 0.6% to 104.78, while the euro shed 0.5% to $1.0716 against the greenback.

Precious metals dove into negative territory, with gold trimming 1.3% to $1,994 per ounce and silver decreasing 2.7% to $22.08.

Oil prices rose around 0.5%, with global benchmark Brent crude adding 0.45% to $82.37 per barrel and US benchmark West Texas Intermediate crude increasing 0.53% to $77.33.