US CPI and Core CPI data weighed heavily on the market with higher than expected numbers. The CPI rose to 2.1% YoY for January, rather than showing a fall to 1.9%.
This now raises hopes for a faster series of rate hikes by the Fed in the coming days. Fed Fund futures currently show a 23% chance of four rate hikes in 2018, which ranged below 17% on Tuesday. Dow slipped more than 300 points as the news hit the wire. However, panic wasn’t as intense as we have seen in the recent past, the recovery came along quickly. These results were somewhere priced into the market sentiment as can be observed with the speedy recovery.