KHC - Red-Hot U.S. Inflation Report Pushes Stocks Down

Stocks wavered Tuesday and the Dow Jones Industrials fell, reversing earlier gains, after the January consumer price index report showed that inflation grew at higher-than-expected annual rate.

The 30-stock index came off its lows of the afternoon, but still finished way below breakeven, off 156.14 points, to conclude Tuesday at 34,089.79.

The S&P 500 was also red, but only 1.11 points to 4,136.18.

The NASDAQ Composite found its footing and marched 68.36 points to 11,960.15, boosted by technology stocks including Tesla which rose more than 7%, and Nvidia, up 5%.

A stubbornly high inflation reading initially sent stocks sliding. The consumer price index rose 0.5% for the month, which translated to an annual gain of 6.4%. That was slightly higher than economist estimates of the basket of goods and services rising 0.4% on the month and 6.2% on the year, according to a survey by Dow Jones.

In addition, the December report was revised to show a slight gain instead of a decline.

Before the number was released, JPMorgan's trading desk predicted that an annual increase of 6.4% to 6.5% would trigger an S&P 500 loss of about 1.5% on Tuesday. It was better than worst fears of a greater than 6.5% annual increase, an acceleration in inflation that would have triggered an S&P 500 decline of 2.5%, JPMorgan predicted.

Beyond the CPI, investors will also be watching for earnings for insights into the health of the consumer. Kraft Heinz, Boston Beer and DoorDash are all scheduled to report this week.

Prices for the 10-year Treasury fell, raising yields to 3.75% from Monday's 3.71%. Treasury prices and yields move in opposite directions.

Oil prices weakened 98 cents to $79.16 U.S. a barrel.

Gold prices regained three dollars to $1,866.50 U.S. an ounce.