US stocks closed higher on Wednesday, bouncing back after hotter-than-expected inflation data drove a sell-off and dashed hopes for interest rate cuts in early spring.
The Dow Jones Industrial Average (^DJI) rose 0.4% after the index suffered a 500-point drop and the blue-chip benchmark's worst day since March 2022 on Tuesday. The S&P 500 (^GSPC) added almost 1%, while the Nasdaq Composite (^IXIC) climbed almost 1.3% — also on the heels of sharp declines.
In fixed income, the 10-year Treasury yield (^TNX) pulled back slightly from the previous day's jump to trade around 4.27%.
Calm is settling in after the surprise consumer inflation print spooked the market. Investors are coming to grips with the prospect of the Federal Reserve holding off on rate cuts until later in the year — and a potential "no landing" for the US economy.
In a Wednesday speech, Chicago Fed President Austan Goolsbee cautioned market participants shouldn't get "too flipped out"over one inflation report and added that the underlying trend still shows inflation is "approaching" the Fed's 2% target.
Investors were gripped by the wild fallout from a typo in Lyft's (LYFT) financial update late Tuesday. Shares in the ride-hailing company initially rocketed 67%, but the rally lost steam after Lyft corrected an error in its statement that boosted its profit outlook. The stock finished up a more modest 35% in Wednesday's trading session.
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