Wall Street plunges on soaring inflation

Markets react to higher inflation figures than expected.

By Nadia Elbilassy | @Nadia Elbilassy | 14 February 2024

Market open
  • USD hits 3-month high on higher-than-expected US inflation, reinforcing Fed rate hold in March.

  • Dow records largest one-day drop in nearly a year, S&P 500 and Nasdaq also decline.

  • CBOE Volatility Index surges to highest level since November amid market fears.

On the Market Watch:

In Currencies

The dollar reached its highest levels in three months following the greater than expected US inflation data for January. Which heightened expectations of the Federal Reserve maintaining the current interest rates in the March meeting.

The Federal Reserve has consistently communicated its intention to await further evidence indicating that the rate of price growth is consistently approaching its 2% target before considering a reduction in borrowing costs from the current levels, which are at highs not seen in over two decades.

The U.S. dollar surpassed 150 yen, marking the first occurrence since November, in response to the released data.

In stocks

Major indices tumbled overnight as markets priced in the next Federal Reserve move and as US treasury yields rose.

The Dow Jones dropped to its biggest one-day percentage in almost a year, The S&P 500 also lost 1.40% to end near 4,955 down from its 5049 peak, touched at the start of the week. Whilst the Nasdaq lost 1.79% to touch lows of 17,471.

Additionally, The CBOE Volatility Index, a measure of market expectations for future volatility and reflects investors sentiment, reached its highest level since November.