Stocks Turn Lower; Treasuries Gain on Subdued CPI: Markets Wrap

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(Bloomberg) — U.S. stocks headed for a second straight drop while Treasury yields dipped after a tame inflation reading raised worries that short-term economic growth remains lackluster.

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Technology shares led declines in the S&P 500 Index, while the Dow Jones Industrial Average held a small gain. The 10-year Treasury yield fell back below 1.15% after the core consumer price index was unchanged last month. Stocks started the day at an all-time high on speculation the weak reading on prices meant growth could accelerate without bringing destabilizing inflation.

The CPI data are part of an intensifying debate in financial markets over the course of inflation. Despite the muted January figure, investors continue to worry that price pressures are set to increase in the months ahead as Congress passes an aid bill and more vaccinations spur consumer spending.

“The stock market has seen a strong rally over the past six trading days, so I think it’s just using the inflation data as an excuse to take a breather,” said Matt Maley, chief market strategist at Miller Tabak + Co.

Twitter Inc. climbed after reporting a jump in revenue. Lyft Inc. rallied as the co-founder said the ride-hailing company will “absolutely” turn a quarterly profit this year.

European shares edged lower, while stocks in Asia gained. Outside of equities, the moves were relatively muted. Oil prices climbed. The dollar turned lower following the inflation report.

© Bloomberg Global stocks advanced, giving the longest streak of gains since November

Surging Inflation May Force Fed to Resort to Yield Curve-Control

Elsewhere, platinum rallied to a six-year high on expectations it will benefit from tight supplies and investment demand. Bitcoin slipped below $45,000. Yields on the 30-year Treasury were holding just below 2% after crossing that threshold earlier this week.

Here are some key events coming up:

Federal Reserve Chair Jerome Powell will speak on a webinar Wednesday.Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.Bank of Russia’s policy decision comes Friday.

These are the main moves in markets:

Stocks

The S&P 500 Index fell 0.1% as of 1:10 p.m. in New York.The Stoxx Europe 600 Index fell 0.2%.The MSCI Asia Pacific Index rose 0.8%.The MSCI Emerging Market Index gained 1.1%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%.The euro added 0.1% to $1.2134.The British pound rose 0.2% to $1.3844.The Japanese yen slipped 0.1% to 104.68 per dollar.

Bonds

The yield on 10-year Treasuries fell two basis points to 1.14%.The yield on two-year Treasuries was unchanged at 0.11%.Germany’s 10-year yield rose one basis point to -0.44%.Britain’s 10-year yield climbed two basis points to 0.48%.

Commodities

West Texas Intermediate crude gained 0.6% to $58.73 a barrel.Gold fell 0.1% to $1,836.45 an ounce.

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