Dow Jones Climbs as CPI Inflation Cools to 9-Month Low

The Dow Jones (DJIA) is set to open Friday higher following an inflation update from the Bureau of Labor Statistics (BLS).

Claim 30% Off TipRanks

In January, the Consumer Price Index (CPI) increased by 0.2% month-over-month, below the consensus estimate of 0.3%. On an annual basis, CPI rose by 2.4%, also below the expectation of 2.5% and marking the slowest pace of growth since May 2025.

Cooling Inflation Spurs Rate Cut Odds

Core CPI, which excludes volatile food and energy prices, notched a 0.3% increase from the prior month, in line with the estimate. On an annual basis, core CPI was 2.5%, matching the estimate and falling to its lowest level since March 2021.

“This was an encouraging inflation report, especially with many key items moderating,” said Navy Federal Credit Union Chief Economist Heather Long. “The one sore spot is electricity (+6% in past year) and utility gas (+10%).”

With easing inflation, the Fed has more reason to cut interest rates. Traders now expect a 26.4% chance that the central bank will cut rates at the April 29 Federal Open Market Committee (FOMC) meeting, up from 23.9% a day ago, according to the CME FedWatch tool.