Dow Falls 524 Points – Worst Since March

The stock market experienced a significant decline on Tuesday, with the Dow Jones Industrial Average plummeting by 524.63 points, marking its worst day since March 2023 in terms of percentage loss.

This downward trend was triggered by a higher-than-anticipated inflation report for January, causing Treasury yields to surge.

The surge in yields raised concerns about the Federal Reserve's ability to implement multiple rate cuts throughout the year, which had been a pivotal factor supporting the bullish outlook for the equity market.

Closing at 38,272.75, the Dow Jones Industrial Average saw a 1.35% decline, reaching its lowest level at 1.95% during the day.

The S&P 500 also experienced a 1.37% drop, settling at 4,953.17, while the Nasdaq Composite fell by 1.8%, closing at 15,655.60.

The Russell 2000 faced a significant setback, plunging nearly 4%, marking its worst session since June 2022.

The Consumer Price Index (CPI) for January reported a 0.3% increase from December, with an annual rise of 3.1%.

Economists, surveyed by Dow Jones, had predicted a 0.2% month-over-month increase in January and a 2.9% year-over-year increase.

Core prices, excluding volatile food and energy components, rose by 0.4% month over month and 3.9% year over year. Expectations were set at 0.3% and 3.7%, respectively.

In response to the CPI data, the 2-year Treasury yield surged beyond 4.66%, and the 10-year yield exceeded 4.32%.

Notably, technology shares, such as Microsoft and Amazon, which had driven the market to record highs during periods of declining rates, experienced notable losses.

Microsoft and Amazon both incurred losses exceeding 2%.