Inflation may not change that quickly, but inflation expectations can change very abruptly — like this week, when a hotter-than-expected CPI number finally pushed the market over the edge and convinced investors to stop expecting a rate cut in March, or five+ rate cuts this year. That relatively small shift in sentiment, with the market already at a high valuation and with high growth expectations driven by the AI mania, created huge selling pressure as traders pulled back quickly after the cute puppy bit them on the hand. About the only stock that could fight through to a “green” day on Wednesday was NVIDIA, which is not exactly a great sign.
Also, February is the 2nd worst month for stocks during a year, according to statistics. So, caution is advised, also being a US election year, there are high chances that the market could calm down or move sideways or dip at bit, you cannot time the market. Expect volatility until the summer.
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