“Markets Come to Grips with Fed on Interest Rates as Stock Futures Slide Amid Inflation Data”

Stocks opened lower on Tuesday as investors digested a hotter-than-expected inflation report and braced for a rate hike from the Federal Reserve.

The Dow Jones Industrial Average fell 250 points, or 0.8%, at the open, while the S&P 500 and Nasdaq Composite were both down 0.6%.

The Labor Department reported earlier that the Consumer Price Index rose 0.3% in January, higher than the 0.2% increase that economists had expected. The report also showed that the core CPI, which excludes food and energy, rose 0.4%, also higher than the 0.2% increase that was forecast.

The hotter-than-expected inflation data has investors concerned that the Federal Reserve may raise interest rates sooner than expected.

“The market is coming to grips with the Fed on interest rates,” said The Wall Street Journal. “The central bank is likely to remain on the sidelines for now, but investors are growing increasingly wary of the possibility of rate hikes in the future.”

Meanwhile, stocks got a boost from strong retail sales data, which showed that sales rose 0.3% in January, better than the 0.2% increase that was expected.

However, the market’s gains were short-lived as investors took a cautious approach ahead of the Fed’s next meeting.

“The market is still in a wait-and-see mode,” said Yahoo Finance. “Investors are watching for any signs of a rate hike, and they’re also keeping an eye on the ongoing stimulus negotiations in Washington.”

In addition, investors are also keeping an eye on the latest data on producer prices, which showed that the Producer Price Index rose 0.5% in January, higher than the 0.2% increase that was expected.

“Futures extended losses after the hotter-than-expected PPI data,” reported Reuters.

In conclusion, markets are coming to grips with the Fed on interest rates as investors remain cautious ahead of the Fed’s next meeting.