U.S. stocks pared early losses on Wednesday but remained mostly lower after inflation data came in hotter than expected, potentially complicating the Federal Reserve's job of returning inflation to its 2% target.

U.S. stock futures were sliding on Wednesday early morning after the consumer-price-index report showed headline inflation rose 0.5% in January, putting the annual inflation rate at 3%. The Dow Jones Industrial Average futures were falling 1%,

Investors are now betting that the Federal Reserve will cut interest rates just once more this year, a drastic shift in expectations since late 2024.

Stocks sell off broadly, with the tech sector taking a bigger blow after back-to-back hot inflation prints suggest a stalling of price deceleration. The Dow Jones Industrial Averaged fell 440 points,

The Dow dropped by 150 points Wednesday afternoon as the latest inflation data was higher than expected. The report comes as the ongoing tariff war has already raised fears among investors about higher inflation,

Stock index futures fell sharply on Wednesday, while yields rose as retail inflation came in hotter than expected. S&P 500 futures (SPX) -0.9%, Nasdaq 100 futures (US100:IND) -1%, and Dow futures (INDU) -0.