- January's CPI report came in hotter than expected.
- Investors think the Fed will slow down its rate-cutting campaign.
- Reddit shares fell after a Google algorithm change.
Here are five key things investors need to know to start the trading day:
1. CPI-aye-aye
The S&P 500 fell 0.27% Wednesday, while the Dow Jones Industrial Average tumbled 225 points, or 0.5%, after January's consumer price index jumped more than expected. The Nasdaq Composite was the outlier, with a 0.03% gain. The CPI rose a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, leading to a sell-off for stocks. The 10-year Treasury yield, meanwhile, rose to a session high of 4.66%. Follow live market updates.
2. Hopes cut
Investors feel less confident that the Federal Reserve will resume its interest rate-cutting campaign soon. After Wednesday's CPI reading, futures markets shifted from anticipating a cut in June to expecting a cut in September. The CPI report showed little progress toward the Fed's goal of 2% inflation. Fed Chair Jerome Powell told the House Financial Services Committee that the central bank had made "great progress" on inflation, "but we're not quite there yet. So we want to keep policy restrictive for now."
3. Reddit downvote
Reddit shares fell nearly 15% in premarket trading Thursday after the company reported weaker-than-expected user numbers. Although its fourth-quarter earnings and revenue beat expectations, the number of global daily active unique users Reddit reported fell short of Wall Street's forecast. Google made changes to its algorithm search, which caused "volatility" that has since recovered, Reddit CEO Steve Huffman said in a letter to shareholders.
4. Nissan off
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Japanese automakers Honda and Nissan have officially called off merger talks. Their potential $60 billion deal would have created the world's third-largest auto company by sales volumes. The two companies said they will continue to collaborate "within the framework of a strategic partnership" with a focus on electric vehicles.
5. Tit for tariff
President Donald Trump could announce his plan for reciprocal tariffs as soon as Thursday, the White House said. The president has threatened to hit "every country" that imposes import duties on the U.S. His focus on the duties shows how Trump is making tariffs a key component of his economic agenda. "Very simply it's if they charge us, we charge them," he said on Air Force One, NBC News reported.
Money Report
— CNBC's Pia Singh, Jeff Cox, Jonathan Vanian, Lim Hui Jie and Kevin Breuninger contributed to this report.
