SPX-500: US stock futures tumble after upbeat CPI

US core inflation rose above expectations in January a sign of the rising economy finally generating some price pressures.
The US core retail sales disappointed in January.

US stock futures (SPX-500) are now trading down 0.4% at around 2,643 during pre-New York session, after the US inflation figures surprised on the upside rising 0.5% m/m and 2.1% y/y in January. At the same time, the US core retail sales fell -0.3% m/m in January. The news is equity market negative with main indices instantly falling in a knee-jerk reaction. The combination of low growth and higher inflation known as “stagflation” scared investors that sold futures to their intraday low of 2,627.

The much awaited and the “most important ever” US core CPI for January rose 0.3% m/m compared to 0.2% m/m increase expected by the market. When compared to a year ago, the core inflation rose 1.8% y/y vs estimate of 1.7% y/y. The headline CPI rose 2.1% vs estimate of 1.9% dwelling at the unchanged level from December.

The core retail sales in the US stagnated in January compared to the market estimate of 0.5%.

Subsequently, US10YTSY yield surged to 2.882% and SPX-500 tumbled and USDJPY jumped as the market is now discounting a hawkish Fed, looking for at least 3 rate hikes in 2018 to stay ahead of the inflation curve.

EUR/USD remains offered below 1.1600, seems vulnerable near multi-month low

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1530 region, or the lowest level since November 2025, and lower for the third consecutive day on Wednesday. Spot prices slide back below the 1.1600 mark during the Asian session and seem vulnerable to slide further.

GBP/USD weakens to near 1.3300 as geopolitical risks bolster US Dollar

The GBP/USD pair attracts some sellers to around 1.3310 during the early European session on Wednesday. Escalating conflict in the Middle East triggers a "flight to safety," supporting the US Dollar against the Pound Sterling. Traders will take more cues from the US ADP Employment and ISM Services Purchasing Managers Index reports, which are due later on Wednesday.

Gold sticks to intraday gains above $5,150; upside seems limited amid bullish USD

Gold preserves its modest intraday gains through the Asian session on Wednesday and currently trades just above the $5,150 level, up around 1.30% for the day. Investors remain concerned about a prolonged conflict in the Middle East and its impact on the global economy amid an already uncertain environment.

Bitcoin, Ethereum and Ripple struggle for direction as consolidation persists

Bitcoin, Ethereum and Ripple prices trade with a cautious tone at the time of writing on Wednesday as upside momentum continues to fade across the broader crypto market. BTC remains within a parallel channel, ETH struggles below key resistance, while XRP remains fragile within a descending channel. These top three cryptocurrencies by market capitalization continue to struggle to establish a directional bias amid the consolidation phase.

When rates start driving the bus through a war zone

The volatility regime itself is also changing character. EM carry trades thrive in calm markets. They suffocate in environments that resemble Buckaroo Banzai trading conditions, where headlines move faster than models. That is exactly the world investors are now trying to recalibrate to. Euro rate volatility had been remarkably subdued even while equities were wobbling. That stability is now being questioned, and once volatility leaks into rates it rarely stays contained. Indeed, carry trades love calm seas. War turns the ocean into white water.

Ripple falters amid sell-off jitters and negative funding rates

Ripple (XRP) has come under pressure, drifting lower to $1.35 at the time of writing on Tuesday. The over 2% correction looks poised to erase the previous day’s gains, which lifted the remittance token to $1.42.