The stock market decline on hotter inflation presents a buying opportunity. Here’s why

Real Estate

Traders work on the floor of the New York Stock Exchange during afternoon trading on February 05, 2024 in New York City. 
Michael M. Santiago | Getty Images

Wall Street took a nosedive Tuesday following the before-the-bell release of hotter-than-expected January consumer inflation data. In response, bonds sold off, pushing the 10-year Treasury yield above 4.30% and equity prices sharply lower. The Dow, the S&P 500 and the Nasdaq were all down more than 1.5%, as the odds of a Federal Reserve interest rate cut in May dropped to 33% from prior levels above 61%, according to the CME FedWatch Tool.

The headline consumer price index (CPI) number was up 0.3% in January versus 0.2% expected, and up 3.1% year over year versus up 2.9% expected. The core rate, excluding food and gas prices, was up 0.4% month over month versus up 0.3% expected, and up 3.9% year over year versus up 3.7% expected.

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