As US Inflation Stays High, Stock Markets Drop

The US inflation report for Tuesday was higher than expected, having a negative impact on all three major stock market indexes.

An inflation rate of 3.1% had the Dow Jones falling by 524 points, with the Nasdaq Composite down 1.8%, and the S&P 500 falling 1.37%. The expected inflation rate for January was 2.9% for the month, according to economists. With the inflation rate so high, the markets are going to take a hit for a while.

Inflation Is Down from 2022’s High

The good news is the US inflation has fallen from its high in June 2022 of 9%. It continues to fall but at a slower than expected rate, making it difficult for US stock markets to stay high.

In recent weeks, the stock markets have posted incredible highs, so today’s drops may not have much overall impact for the week. The markets could bounce back quickly from the inflation report thanks to other positive factors.

As inflation drops, the Consumer Price Index is on the rise, increasing by 0.3% for January. This rate is also higher than expected, but it is balanced out by a positive US jobs report and the fact that the Federal Reserve is not cutting interest rates for March this year.

The Stocks to Watch

Even though the stock markets are slightly down overall, some stocks are doing incredibly well. MicroCloud Hologram Inc. (HOLO), which produces imaging technology, is still gaining, with a 37% increase. Digital Group Brands Inc. (DBGI) is up an astounding 139%, topping the market right now.

Whole Earth Brands (FREE) and JetBlue (JBLU) are also reporting very high numbers, up 35% and 21% respectively. We have been reporting on Disney’s (DIS) stock movements lately after they had a great year, and their stock is still high, moving up 1.07% today and 17% for the month, at 110.46 points.

Despite the market drops today, the Dow Jones is actually up 1.20% for the month. We expect the recent hit to only be a minor hurdle in an overall decent month for the markets.