US stocks tumbled on Tuesday after fresh data revealed that inflation eased somewhat, but stayed stubborn in January.
This comes after the Dow Jones Industrial Average on Monday notched a record high close, while the S&P 500 retreated somewhat from a record high, CNN reported.
The Dow slid 527 points, or 1.4 per cent, the S&P 500 declined 1.4 per cent, while the Nasdaq Composite lost 1.7 per cent, the report said.
The Consumer Price Index (CPI) revealed that prices rose by 3.1 per cent for the 12 months ended in January, according to the US Bureau of Labor Statistics data released on Tuesday. On a monthly basis, CPI rose by 0.3 per cent last month.
Both measures came in hotter than expected: Economists expected inflation to ease to 0.2 per cent from December and slow to 2.9 per cent annually, according to FactSet, CNN reported.
Traders now largely expect the Federal Reserve to first cut rates in June or July, according to the CME FedWatch Tool.
“With this new data, a first cut in June seems like the most reasonable expectation unless we see a very quick, severe drop in labor market activity or a geopolitical shock,” Greg Wilensky, head of US fixed income at Janus Henderson Investors, wrote in a note on Tuesday, CNN reported.