<ul>
<li>Nasdaq up ~0.5%, S&amp;P 500 now modestly green, Dow dips ~0.3%</li>
<li>Energy leads S&amp;P 500 sector gainers; Staples weakest group</li>
<li>Euro STOXX 600 index falls ~0.5%</li>
<li>Dollar, bitcoin rise; US crude up &gt;3%; gold slips</li>
<li>US 10-Year Treasury yield rises to ~4.20% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at</li>
</ul>
<h3>NICE CPI REPORT, IT’D BE A SHAME IF A WAR HAPPENED TO IT</h3>
Investors were treated to pleasant economic news on Wednesday, headlined by the Labor Department’s Consumer Price Index (CPI), which showed the good taste of nailing analysts’ expectations on the head.
The CPI report, which tracks the prices urban consumers pay for a basket of goods and services, grew by 0.3% last month, slightly warmer than January’s 0.2% print.
Year-over-year, CPI posted a 2.4% increase, a repeat of January’s growth rate.
Core CPI, which strips out volatile food and energy prices and is often referred to as “underlying inflation,” also cooperated with consensus by cooling down to 0.2% on a monthly basis and holding firm at an annual 2.5% growth rate. While annual headline and core numbers are both within a half percentage point of Powell &amp; Co’s average annual 2% target, the odds that the central bank could cut interest rates in the first half of the year are still fairly low, according to CME’s FedWatch Tool.
There are, of course, clouds on the horizon in the form of the U.S.-Israeli war on Iran, which has launched crude prices into the stratosphere and revived worries of inflation. This report predates the onset of that war, now in its 11th day.
Still, it’s the second take on February inflation, after Friday’s hotter-than-expected wage growth data.
“This report is a relief,” Peter Cardillo, chief market economist at Spartan Capital Securities, tells Reuters, adding, “The Fed is likely to be very much focused on the war. No one knows where inflation could be headed over the next few months.”
Many analysts have a pretty good idea where inflation is headed.
“March’s inflation data is going to be a harder pill to swallow, as it will reflect the effects of the war with Iran,” writes Art Hogan, chief market strategist at B. Riley Wealth. “Gasoline prices are up more than 20% compared with a month ago, which will likely drive energy and transportation prices higher and in turn boost inflation.”
Line-by-line, a 0.6% increase in energy prices revved up gasoline prices, which increased by 0.8%.
The cost of an airline ticket rose by 1.4%.
Food prices, up 0.4% last month, have risen by 3.1% from February 2025.
The cost of shelter and services, two metrics closely watched by the Fed, rose 0.2% and 0.4%, respectively. Year-over-year, shelter prices have risen by 3.0% and services show annual growth of 3.1%. Both continue to coast well north of core inflation.
Pivoting to the housing market, while it grew more expensive to finance home loans last week, borrower applications still increased, according to the Mortgage Bankers Association (MBA).
The average 30-year fixed contract rate (USMG=ECI) added 10 basis points to land at 6.19%.
Even so, applications for loans to purchase homes (USMGPI=ECI) jumped by 7.8%, while refi demand (USMGR=ECI) , which accounted for 57.8% of total mortgage activity, increased by a more languid 0.5%.
Combined, total mortgage demand grew by 3.2%.
“The pace of homebuying continues to track ahead of last year’s pace, with overall purchase volume up 10 percent,” says Mike Fratantoni, MBA’s chief economist. “More inventory on the market is supporting more transactions.”
The 30-year fixed rate currently sits 48 basis points below where it was a year ago.
Purchase and refi demand have risen by 10.8% and 80.7% over the same time period.
(Stephen Culp)
<h3>EARLIER ON LIVE MARKETS: WALL STREET INDEXES MIXED AFTER IN-LINE CPI WHILE OIL CLIMBS AGAIN CLICK HERE MIDDLE EAST’S TRADE MIGHT RUNS FAR BEYOND OIL, BARCLAYS SAYS CLICK HERE US STOCK FUTURES EDGE DOWN WITH IN-LINE CPI CLICK HERE ITRAXX MORE VOLATILE THAN BOND CASH INDEXES CLICK HERE ENERGY PRICE SHOCK HISTORY REPEATING ITSELF? CLICK HERE AJ BELL’S DIY INVESTORS BOUGHT THE DIP CLICK HERE CAN MARKETS GET COMFORTABLE WITH THE WAR? CLICK HERE EARNINGS BRIEFLY IMPORTANT FOR EUROPEAN MARKETS; INDITEX, RHEINMETALL IN FOCUS CLICK HERE BEFORE THE BELL: FUTURES SOFTER, KEEP WATCHING OIL CLICK HERE MORNING BID EUROPE: IT AIN’T OVER YET CLICK HERE</h3>
Inflation gauges
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/gkplkwredvb/inflation.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="650" height="525" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/gkplkwredvb/inflation.png"/>
CPI energy vs crude prices
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/xmpjykzwkvr/cpienergycrude.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="649" height="401" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/xmpjykzwkvr/cpienergycrude.png"/>
CPI shelter and services
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/byvrnlzdave/cpishelter.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="649" height="399" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/byvrnlzdave/cpishelter.png"/>
Mortgage demand
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/zgpolbqelvd/mba.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="600" height="500" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/USA-STOCKS/zgpolbqelvd/mba.png"/>

LIVE MARKETS-Nice CPI report, it'd be a shame if a war happened to it