Stocks steady after hot inflation print

Stocks were slightly higher on Friday, steadying after Thursday’s losses as jitters over a swift tightening of financial conditions increasing on the heels of a multi-decade high print on inflation.

The S&P 500, Dow and Nasdaq fluctuated between small gains and losses during the morning session. The S&P 500 slid by 1.8% on Thursday and the Nasdaq dropped 2.1%, as technology shares came under pressure while Treasury yields spiked. The benchmark 10-year yield drifted slightly lower on Friday after breaking above 2% for the first time since August 2019 a day earlier.

Stocks sold off and yields climbed after the Bureau of Labor Statistics’ January Consumer Price Index (CPI) showed the biggest annual jump in inflation since 1982.

The surging 7.5% jump in prices escalated calls for the Federal Reserve to raise interest rates more aggressively than previously expected and begin rolling assets off its balance sheet, in moves that would curb liquidity in the financial system and dampen soaring consumer demand and prices. St. Louis Federal Reserve President James Bullard told Bloomberg News on Thursday he wanted to see interest rates be raised by a full percentage by July and start the Fed’s balance sheet run-off process in the second quarter, in one of the most hawkish paths so far telegraphed by a Fed official.

“That’s not out of the realm of possibility,” David Spika, GuideStone Capital Management president, told Yahoo Finance Live on Thursday about Bullard’s suggestion. “The Fed…

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