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U.S. inflation moderated in January, dollar falls
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Stocks up, but retreat from session highs
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Gold gains as dollar flags
Feb 14 (Reuters) - Global stocks gained, while the dollar fell in volatile trade on Tuesday after data showed U.S. inflation rose at its slowest pace since late 2021 in January, reinforcing investor expectations that the Federal Reserve is nearing the end of its rate-hiking cycle.
The consumer price index increased 6.4% in the 12 months through January, more than the 6.2% expected but marking its smallest annual rise since late 2021. Month-on-month, consumer prices rose 0.5% in January, after gaining 0.1% in December, the Labor Department said on Tuesday.
MSCI's all country index jumped by as much as 0.45% to session highs, before retreating to show a gain of 0.2% on the day. Europe's STOXX 600 index hit a new one-year high, rising as much as 0.9%.
The softer annual reading strengthened expectations for a hike of just 25 basis points from the Fed next month. Investors now attach a 93.5% chance of a quarter-point rise in March, up from around 87% before the data. "The data doesn't really change the expectations of a 25 basis point hike at the next meeting," said Robert Pavlik, senior portfolio manager at Dakota Wealth, Fairfield. "I do expect a pause to be coming somewhat soon." Yields on U.S. 10-year Treasuries fell 2.7 bps on the day to 3.6844%, having fallen by as much as 9 bps in the immediate wake of the data. The dollar index was last down 0.3%, having fallen by as much as 0.7%.
U.S. stock futures shot up, with the Nasdaq 100 rising as much as 1% before giving up those gains and were last trading flat, as were those on the S&P 500 Gold , which tends to benefit from a weaker dollar, rose 0.7% to $1,865.49 an ounce, near session highs.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets Asia-Pacific valuations ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Stella Qiu, Susan Mathew and Amanda Cooper; Editing by Sam Holmes, Sharon Signleton, Chizu Nomiyama and Christina Fincher)
