The Japan Times - US stocks mostly lower on inflation, euro gains on Ukraine peace hopes

Major US indices began the day firmly in the red after January US consumer price index data showed inflation grew, raising questions about whether the Federal Reserve's progress on bringing down prices was reversing.

While both the Dow and S&P 500 dropped, they finished well above session lows. The Nasdaq mustered a small gain.

"Equities were a lot more resilient than I would have expected given the news we had this morning," said Jack Ablin of Cresset Capital.

Still, US Treasury yields advanced, a sign investors see lower odds for Fed interest rate cuts.

"Investors were looking for reassurance in this morning's inflation report -- and they didn't get it," said Bret Kenwell, US investment analyst at the trading platform eToro.

He said the "higher-than-expected print further lowers the odds of rate cuts from the Fed this year and stokes investors' reflationary fears."

Analysts warn that US President Donald Trump's tariffs -- and plans to slash taxes, regulations and immigration -- risked reigniting inflation.

"What makes today's rise in CPI inflation data so precarious is that many believe this is just the beginning, as tariffs could push inflation even higher," said Jochen Stanzl, chief market analyst at financial services firm CMC Markets.

The dollar initially strengthened after the inflation report, but weakened later against the euro following news that Trump held talks with Russian President Vladimir Putin about immediately starting Ukraine peace talks.

Later Wednesday, Ukrainian President Volodymyr Zelensky said he had had a "meaningful conversation" with Trump and that the leaders discussed ways to end Russia's nearly three-year invasion of Ukraine.

However, crude oil prices finished down more than two percent due in part to expectations for increased Russian oil output.

- Heineken fizzes -

In Asian markets, Hong Kong led gains thanks to another tech rally.

In Europe, London and Frankfurt hit fresh record highs, with support coming from cuts to interest rates in Britain and the eurozone, as well as positive company earnings.

Shares in Dutch brewer Heineken fizzed as traders cheered better-than-expected beer sales. The stock surged 14 percent, making it the biggest gainer on the Amsterdam market.

But Chevron fell 1.6 percent after announcing it will cut 15 to 20 percent of its workforce as part of a reorganization to save money and to position the oil giant for the long-term.

- Key figures around 2150 GMT -

New York - Dow: DOWN 0.5 percent at 44,368.56 (close)

New York - S&P 500: DOWN 0.3 percent at 6,051.97 (close)

New York - Nasdaq: UP less than 0.1 points at 19,649.95 (close)

London - FTSE 100: UP 0.3 percent at 8,807.44 (close)

Paris - CAC 40: UP 0.2 percent at 8,042.19 (close)

Frankfurt - DAX: UP 0.5 percent at 22,148.03 (close)

Tokyo - Nikkei 225: UP 0.4 percent at 38,963.70 (close)

Hong Kong - Hang Seng Index: UP 2.6 percent at 21,857.92 (close)

Shanghai - Composite: UP 0.9 percent at 3,346.39 (close)

Euro/dollar: UP at $1.0387 from $1.0307 on Tuesday

Pound/dollar: UP at $1.2446 from $1.2368

Dollar/yen: UP at 154.39 yen from 152.00 yen

Euro/pound: UP at 83.40 pence from 83.33 pence

West Texas Intermediate: DOWN 2.7 percent at $71.37 per barrel

Brent North Sea Crude: DOWN 2.4 percent at $75.18 per barrel

burs-jmb/jgc

S.Yamamoto--JT