Softer U.S. CPI Spurs Repricing

Chart showing U.S. Treasury yields and equities reacting to softer January CPI data

Key Points

01Softer U.S. January CPI (0.2% m/m, 2.4% y/y; core +0.3% m/m) pushed Treasury yields lower and prompted markets to re-price earlier Fed easing.
02Rivian's Q4 revenue, first annual consolidated gross profit and delivery guidance drove heavy intraday buying in RIVN and across EV peers.
03Local selling and global repositioning after the CPI release caused Asian markets to lag, with Hang Seng, Shanghai and Nikkei among the weakest.
04Utilities and Real Estate led sector gains while Communication Services, Consumer Discretionary and Financials underperformed amid the re-pricing.

Global Market Summary

The S&P 500 (SPX) finished down 0.09%, the Dow (DJIA) slipped 0.05% and the Nasdaq (^IXIC) fell 0.35% as investors digested a softer U.S. January CPI print that trimmed near-term rate-tightening risk. European benchmarks were mixed, with the FTSE 100 (UKX) up 0.42% and the DAX (DAX) up 0.25% while the CAC 40 (FRA40) lost 0.35% after euro-area Q4 GDP confirmed steady growth. Asian markets lagged, led by the Hang Seng (HSI) -1.72%, Shanghai Composite (000001.SS) -1.26% and the Nikkei (NKY) -1.21%, amid local selling and global repositioning following the CPI release.

Top Movers

Sectors: Utilities (XLU) led gains +2.56% and Real Estate (VNQ) +1.27%; Healthcare (XLV) +0.96% and Materials (XLB) +0.75% also outperformed. Weakness: Communication Services (XLC) -0.25%, Consumer Discretionary (XLY) -0.10% and Financials (XLF) -0.16% underperformed. Notable stocks: EMAT +29.00%, TPH +26.83% and RIVN +26.36% were top gainers, while IRON -21.77%, BFAM -18.41% and PINS -16.75% paced losses.

Macro highlights

U.S. January CPI printed +0.2% month-on-month and 2.4% year-on-year, with core CPI +0.3% m/m (2.5% y/y); the softer print pushed Treasury yields lower and prompted markets to re-price earlier Fed easing. BOJ board member Naoki Tamura delivered a speech stressing a cautious, data-dependent stance on wage-price pass-through, and the Bank of Russia cut its key rate 50 bps to 15.50%, easing domestic monetary conditions.

News that moved markets

Rivian (RIVN) surged after reporting Q4 revenue of $1.29 billion, its first annual consolidated gross profit and guidance for 62,000-67,000 vehicle deliveries with R2 on track for Q2, which drove heavy intraday buying in the stock and across EV peers. Wendy's (WEN) posted a modest Q4 beat but warned of flat 2026 systemwide sales and margin pressure, prompting mixed intraday reactions as investors weighed persistent traffic weakness.

Upcoming session watchlist

01Japan Balance of Trade (JAN) — forecast ¥-2500.0B vs ¥105.7B prior | Tracks export and import balance, informing external demand and trade momentum.
02United Kingdom Unemployment Rate (DEC) — forecast 5.1% vs 5.1% prior | Gauges labor market slack, informing wage pressure and demand resilience.
03Australia RBA Meeting Minutes — | Provides detail on policy discussions and economic assessment.
04Canada Inflation Rate YoY (JAN) — vs 2.4% prior | Signals price pressures and near-term inflation trend momentum.
05Germany ZEW Economic Sentiment Index (FEB) — forecast 57 vs 59.6 prior | Signals forward-looking economic sentiment and expectations for growth.

Key Takeaways

01Major U.S. indexes closed modestly lower as the softer January CPI reduced near-term tightening risk; the Nasdaq underperformed peers.
02Treasury yields fell after the CPI print, prompting markets to re-price Fed easing and reducing near-term rate-tightening expectations.
03Asian benchmarks declined sharply amid local selling and global repositioning following the CPI release, producing outsized losses in Hong Kong, Shanghai and Tokyo.
04Rivian's upbeat quarter sparked heavy buying that lifted EV peers, while Utilities and Real Estate outperformed and several single stocks posted large swings.

References