Dow Jones Slips as CPI Inflation Climbs 2.4%

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

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In February, the Consumer Price Index (CPI) increased by 0.3% month-over-month, in line with the consensus estimate. On an annual basis, CPI rose by 2.4%, also matching the estimate.

Oil Surge Raises New Inflation Risks

Core CPI, which excludes volatile food and energy prices, came in as expected. It rose by 0.2% month-over-month and 2.5% year-over-year.

The data did little to reassure investors, as it measured prices before the onset of the U.S.-Iran war. With the Strait of Hormuz effectively shut down, oil and gas prices have surged amid a supply crunch and production restrictions. “Perhaps more important than the [February] data is the evolving risk space for inflation,” said Bank of America economist Stephen Juneau.

While energy makes up roughly 7% of the CPI basket, its indirect impact on the cost of other goods and services brings its total economic weight closer to 15%.