Dow drops 200 points after hotter-than-expected CPI report: Live updates

The S&P 500 tumbled and interest rates spiked Wednesday after consumer prices rose more than expected in January, raising concern that inflation may reignite.

The broad market index slipped 0.27% to end at 6,051.97, and the Dow Jones Industrial Average tumbled 225.09 points, or 0.5%, to 44,368.56. The Nasdaq Composite eked out a 0.03% gain to close at 19,649.95.

“The hotter than expected CPI confirms investors’ anxiety regarding too-hot inflation that will keep the Fed on the sidelines (as opposed to cutting rates),” said Sameer Samana, Wells Fargo Investment Institute head of global equities and real assets. “While risk markets can go higher, it will be a choppier trajectory than the last two years,” Samana added.

A sell-off occurred during the trading day after January’s consumer price index jumped 0.5% for the month, putting the annual inflation rate at 3%. Both were more than the respective 0.3% and 2.9% increases expected by economists polled by Dow Jones. Excluding volatile food and energy prices, core CPI rose 0.4% on the month and 3.3% for the past 12 months, both higher than expected.

The 10-year Treasury yield, a benchmark for mortgages, auto loans and credit cards, jumped to a session high of 4.66%. Shares of some megacap technology stocks, including Amazon and Alphabet, declined. Consumer shares and bank stocks at risk of slower spending and a weaker economy also retreated.

Helping sentiment were comments from House Speaker Mike Johnson, who said, according to Reuters, the White House was considering reciprocal tariff exemptions on products such as pharmaceuticals and automobiles. GM and Ford shares closed in positive territory, along with Eli Lilly.

Gains from Tesla, Apple and Palantir also helped curb losses. CVS Health shares popped nearly 15% on a major fourth-quarter earnings beat.

The latest inflation data makes it less likely the Fed will resume its rate-cutting campaign anytime soon and now raises concern perhaps the next move could even be a hike.

Federal Reserve Chair Jerome Powell testified before the House Committee on Financial Services on Wednesday and said the latest CPI data is a reminder that the Fed has made “great progress” toward bringing inflation closer to its 2% target but that it is “not quite there yet.”

“We want to keep policy restrictive for now,” he said before lawmakers in his second appearance on Capitol Hill this week. Powell’s comments follow his Tuesday testimony to the Senate Banking Committee, during which he said the Fed was in no hurry to make further interest rate cuts.

President Donald Trump said Wednesday morning before the CPI data was released that interest rates should be lowered.

CNBC Pro: Jeremy Siegel is cautious on the ‘Magnificent 7’

Wharton School Professor Jeremy Siegel is uncertain whether the “Magnificent Seven” companies can continue to enjoy the run they’ve had, and expects the other sectors could start to outperform.

“We have these two markets. We have the Mag Seven, which is ex-Tesla is selling for 30, 35, and then we have the other 493 stocks that are selling more towards 19, which is, to me, very reasonable,” Siegel told CNBC’s “Squawk Box” on Wednesday, referring to the stocks’ valuation on a price-to-earnings basis. “I’ve often talked about 20 as an equilibrium P/E, so it really depends on what happens to that section.”

“Is that sector going to be the leader in the next bull market?” he asked.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Quantum computing stocks jump

Quantum computing stocks soared on Wednesday as traders bought the dip amid the sell-off sparked by the January inflation report and ongoing volatility in the market.

Rigetti Computing gained about 6%, while D-Wave Quantum gained 12% and BTQ Technologies added roughly 4%. IonQ shares also rose. Each of these stocks have been hammered since the start of the year.

— Pia Singh

White House says reciprocal U.S. tariffs could come by Tuesday

The White House said President Trump could announce reciprocal tariffs on imports from other countries before his meeting with Indian Prime Minister Narendra Modi on Thursday.

“I do believe it will come before the prime minister’s visit tomorrow,” press secretary Karoline Leavitt told reporters at the White House when asked about Trump’s forthcoming announcement.

— Fred Imbert

CVS shares on pace for best day since October 1999

Shares of CVS rose more than 16% in afternoon trading, a climb that put the stock on track for its best day in more than 25 years.

If the stock closes around this level, it would see its largest percentage increase in a single day since Oct. 6, 1999, when it climbed 18.2%. Its next best day on record is Oct. 28, 2008, when it advanced 13.9%.

The move comes on the heels of the company’s fourth-quarter earnings and revenue beating Wall Street’s expectations.

While the stock has underperformed the broader market over the past year, falling more than 17% over the past 12 months, it has outperformed in this young year, seeing year-to-date gains of more than 42%.

— Sean Conlon

Small caps underperform in session, week

Small-cap stocks saw outsized losses on Wednesday, adding to an already tough week for the group.

The Russell 2000 dropped nearly 0.8% in the session. By comparison, the broad S&P 500 ticked lower by just 0.2%.

With that slide, the Russell 2000 was down about 1% week to date. The S&P 500, meanwhile, has risen 0.5% during the same period.

— Alex Harring

Stocks making the biggest midday moves: CVS, Zillow and more

These are the stocks moving the most in midday trading:

• CVS — The pharmacy retailer surged 15% after reporting fourth-quarter adjusted earnings of $1.19 per share on revenue of $97.71 billion.
• Zillow — The real estate marketplace tumbled 10% after providing weak first-quarter guidance.
• Avis Budget Group — The car rental company lost 8% after reporting a fourth-quarter net loss of $2 billion, while its revenue of $2.71 billion came below FactSet’s consensus of $2.72 billion.

Read the full list of stocks moving here.

— Lisa Kailai Han

NYSE says it will create a Texas stock change

The New York Stock Exchange will soon have a foothold in the Lone Star State. The NYSE announced Wednesday that one of its electronic exchanges, NYSE Chicago, will reincorporate in Texas and be renamed NYSE Texas.

“As the state with the largest number of NYSE listings, representing over $3.7 trillion in market value for our community, Texas is a market leader in fostering a pro-business atmosphere,” Lynn Martin, NYSE Group president, said in a release.

The move signals a potential competition to become the leading stock exchange in Texas. Last month, TXSE Group announced it had filed for registration of the Texas Stock Exchange with the U.S. Securities and Exchange Commission. TXSE Group said it has raised $161 million and intends to launch trading in early 2026.

— Jesse Pound

Kraft Heinz shares tumble 4% as investors fret there’s no easy fix to its weak sales

Kraft Heinz shares fell 4% to a fresh 52-week low after the food company warned fiscal 2025 earnings would fall short of analysts’ estimates. The maker of Ore-Ida fries and Philadelphia cream cheese expects its organic sales will be flat to down this year.

Even worse, there is risk of further downside because the forecast does not account for any potential hits from tariffs, the worsening of the economy or reductions in SNAP benefits, all of which could make it more challenging to deliver its results. Kraft Heinz has been hurt by shoppers trading down to private-label products in the face of high inflation. The company expects it will need to adjust price gaps to help improve the performance of key brands such as Capri Sun. In some cases, prices will be lowered permanently rather than done through temporary promotions. Kraft Heinz Chief Financial Officer Andre Maciel said there wasn’t “a silver bullet” to jumpstart sales.

— Christina Cheddar Berk

Powell indicates Trump call for lower rates won’t influence policy

Federal Reserve Chair Jerome Powell said Wednesday that interest rate decisions won’t be based on political pressure, even if that’s coming from President Trump.

Asked about comments Wednesday morning from the president in which he called for lower rates, Powell said, “It’s a practice to never comment on anything the president says, but I think people can be confident that we’ll continue to keep our heads down, do our work, make our decisions based on what’s happening in the economy.”

The response came during questioning in front of the House Financial Services Committee, where Powell was appearing as part of his semiannual testimony on monetary policy. Asked whether statements from elected officials “are not among the things that cause you to act one way or the other,” the chair responded, “That’s correct.”

— Jeff Cox

Charles Schwab expands ’24/5′ trading to all clients

All Charles Schwab customers can now trade certain stocks and funds 24 hours a day during the business week, the financial firm said Wednesday.

The move follows a series of pilot rollouts for the “24/5” program that Charles Schwab called “successful.” All stocks in the S&P 500 and Nasdaq 100, as well as hundreds of exchange-traded funds, are now available to trade for Charles Schwab users overnight.

The company said extended-hours trading will not take place on official market holidays or days when exchanges close early. During the pilot, Charles Schwab said the hours between 8 p.m. and 9 p.m. ET and 3 a.m. and 4 a.m. ET were the most popular.

— Alex Harring

Stocks open lower on Wednesday

The Dow Jones Industrial Average dropped 426 points, or 0.9%, shortly after 9:30 a.m. ET. The S&P 500 and the Nasdaq Composite each lost about 1%.

— Pia Singh

CVS, Super Micro among the names making moves before the bell

Check out some of the stocks that are making big moves in the premarket:

• CVS — Shares jumped more than 8% after the pharmacy operator reported fourth-quarter results that beat analysts’ expectations. The company earned an adjusted $1.19 per share on revenue of $97.71 billion. Analysts polled by LSEG expected a profit of 93 cents per share on revenue of $97.19 billion. Full-year earnings guidance, meanwhile, was in line with analysts’ expectations.
• Super Micro Computer — The server builder surged more than 10% despite cutting its fiscal 2025 full-year revenue forecast. Super Micro now expects revenue for the period to come in between $23.5 billion and $25 billion, while analysts were calling for $24.92 billion, per LSEG. The company’s CEO, Charles Liang, also said he is “confident” the company will be able to file its delayed annual report by the Feb. 25 deadline.
• Upstart Holdings — Shares of the consumer lending platform gained more than 26% after its first-quarter guidance was stronger than expected. Upstart expects revenue of $200 million for the current quarter, more than the $193.8 million that analysts had penciled in, according to LSEG. Upstart’s fourth-quarter earnings and revenue also beat analysts’ expectations.

Read here for the full list.

— Sean Conlon

Consumer prices rise more than expected in January

The latest consumer inflation report came in hotter than expected, raising questions about how much the Federal Reserve will be able to lower rates going forward.

The consumer price index rose 0.5% in January month over month, while rising 3% year on year. Economists polled by Dow Jones expected CPI to increase 0.3% month over month and 2.9% year over year.

Core CPI, which strips out volatile food and energy prices, advanced 0.4%, also more than expected.

— Fred Imbert

CVS pops on big earnings beat

CVS shares jumped more than 8% after the pharmacy operator reported fourth-quarter results that beat analysts’ expectations.

The company earned an adjusted $1.19 per share on revenue of $97.71 billion. Analysts polled by LSEG expected a profit of 93 cents per share on revenue of $97.19 billion. Full-year earnings guidance, meanwhile, was in line with analysts’ expectations.

— Fred Imbert

Goldman Sachs downgrades On Holding

Goldman Sachs is stepping to the sidelines on Swiss-based running apparel company On Holding.

Analyst Richard Edwards downgraded shares to neutral from buy, citing the stock’s full valuation. Over the past 12 months, the stock has soared nearly 80%. Edwards maintained his price target of $57 per share, which is 5.6% above Tuesday’s close price.

“We expect On’s brand momentum to remain robust over the medium term,” Edwards wrote in a research note on Tuesday.

However, U.S. credit card growth points to below-consensus growth in the fourth quarter for direct-to-consumer businesses, he added.

“While this data is U.S. specific and we do not expect a miss to consensus expectations for On, we note that sportswear companies that have missed expectations such as Nike, Puma and Deckers have seen significant share price declines recently,” Edwards added.

Furthermore, competition in the running segment has strengthened, per Edwards.

U.S.-traded shares fell 3% Wednesday during premarket trading.

— Hakyung Kim

Asia-Pacific markets mostly rise as investors assess Trump tariff effects

Asia-Pacific markets mostly rose Wednesday as investors digested U.S. President Donald Trump’s tariff effects on regional economies.

Japan’s Nikkei 225 rose 0.42% to close at 38,963.70 after resuming trading following a holiday.

SoftBank Group‘s third-quarter earnings fell short of analysts’ expectations as investments under its Vision Funds fell into the red. The company posted a surprise net loss of 369.17 billion yen, or $2.4 billion, while LSEG had estimated a profit of 298.53 billion yen.

The Topix closed flat at 2,733.33. South Korea’s Kospi added 0.37% to end the day at 2,548.39, while the small-cap Kosdaq fell 0.59% to close at 745.18.

Hong Kong’s Hang Seng Index was up 2.41% in its final hour of trade. Mainland China’s CSI 300 added 0.95% to close at 3,919.86.

India is slated to report its inflation data for January.

The benchmark Nifty 50 was up 0.19%, while the BSE Sensex index was flat as of 1.30 p.m. local time.

Australia’s S&P/ASX 200 ended the day up 0.6% at 8,535.30.

— Amala Balakrishner

Orange juice futures extend losing streak

Orange juice futures (MAR) were lower again Tuesday, marking their eighth consecutive negative session. Orange juice hit a low of 385.50 cents per pound, its lowest level since May 9, 2024. This pullback comes despite futures reaching all-time highs in mid-December.

Market observers are surprised by the recent downturn, given ongoing supply constraints in Florida and Brazil. On Tuesday, the USDA revised its Florida orange production forecast downward to 11.5 million boxes, 4% lower than the previous estimate and a 36% drop from last season.

Three key factors may be driving the decline, according to Danny Munch, an economist at the American Farm Bureau Federation.

First, orange juice prices have risen so high that consumers and food manufacturers may be shifting to alternatives — a classic case of demand destruction. This trend is exacerbated by growing concerns around sugar content in food and beverages.

Second, traders may believe that prices have peaked and production will eventually rebound. With orange juice futures still well above five- and 10-year averages, investors could be taking profits, adding to the selling pressure.

Lastly, a strong dollar and potential tariff concerns make imported orange juice relatively cheaper. This currency effect could be softening price pressures despite supply tightness.

— Nick Wells

Stocks making the biggest moves after hours

Check out some of the companies making headlines in extended trading:

• DoorDash — The food delivery stock traded nearly 6% higher after better-than-expected revenue for the fourth quarter. DoorDash reported revenue of $2.87 billion in its most recent quarter, while analysts surveyed by LSEG forecast $2.84 billion.
• Gilead Sciences — The biopharmaceutical stock advanced 4% after fourth-quarter results surpassed analysts’ estimates on the top and bottom lines. Gilead notched adjusted earnings per share of $1.90 on revenue of $7.57 billion. Analysts polled by LSEG were looking for earnings of $1.70 per share on revenue of $7.14 billion.
• Super Micro Computer — The server builder popped more than 4% even as the company slashed its fiscal 2025 full-year revenue guidance. Super Micro now sees full-year revenue ranging between $23.5 billion and $25 billion, while analysts polled by LSEG called for $24.92 billion. The company also said it thinks it will be able to file its delayed annual report by Feb. 25.

Read the full list here.

— Brian Evans

Stock futures open little changed

Stock futures were little changed on Tuesday as investors look toward the January consumer price index report.

Futures tied to the Dow Jones Industrial Average ticked down 7 points, or 0.02%. S&P 500 futures slipped 0.02%, while Nasdaq 100 futures were 0.05% higher.

— Brian Evans