Retail Sales Surge 3% in January, US Stocks Lower Ahead of CPI Release, Fed Rate Hike Probability at 87.8%

Retail sales in the US surged 3% in January, much higher than the expected 1.8%, according to the Commerce Department. This was the largest monthly gain for retail sales since March 2021 and bodes well for the US economy overall. Excluding autos, retail sales were up 2.3% for the month, higher than the 0.7% estimate. The government also reported that, excluding autos and gas, retail sales rose 2.6% vs. a 0.6% estimate.

US stocks moved lower last week as investors await tomorrow’s consumer price index (CPI) release and continued to digest remarks from Federal Reserve policymakers.[0] The S&P 500 (SPX) closed 1.1% lower, Nasdaq Composite Index (IXIC) fell 2.4%, while the Dow Jones Industrial Average (DJI) had another uneventful week (-0.17%).[0]

Prior to the beginning of trading on Wednesday, the Dow Jones futures decreased by 0.3% in comparison to their expected value, and the S&P 500 futures decreased by 0.35%.[1] Nasdaq 100 futures, which are heavily reliant on technology, declined 0.35% during morning[2] Pre-market trading saw Tesla (TSLA) rise by more than 1% after Barclays began covering the stock with an overweight rating and a target of $275.[3]

The CME FedWatch Tool projects a 87.8% probability of a quarter-point Fed rate hike in March, bringing the Fed’s target rate to between 4.75% and 5%.[4] It is estimated that there is a 12% chance that the Federal Reserve could increase rates by 50 basis points in March.[4]

In commodities markets, oil continued to barrel lower as the dollar rose and U.S. stockpiles were estimated to have grown.[5] The price of West Texas Intermediate (WTI) crude futures, the U.S. benchmark, decreased by 1% on Wednesday morning, trading at approximately $78.[5]

In the US debt market, the yields are moving higher helping to push stocks lower: the 10-year Treasury yield rose 3 basis points to 3.78%.[6] The yield on the two-year US government bond rose 9 basis points to 4.62[7]

Investors were also parsing through more earnings reports this week.[5] Airbnb (ABNB) made headlines after announcing its highest sales ever in the fourth quarter of 2021, resulting in their first profitable year in 2022.[5]

0. “Dow Jones, Nasdaq, S&P 500 weekly preview: Use Q1 rally to cut stocks exposure By”, 13 Feb. 2023,

1. “S&P 500, Nasdaq, Dow ride high Monday as markets await new CPI data” Proactive Investors USA, 13 Feb. 2023,

2. “Dow Jones Drops 200 Points On Strong Retail Sales; Tesla Reverses Lower Despite Buy Rating” Investor’s Business Daily, 15 Feb. 2023,

3. “Markets Today: Stocks Fall as Strong U.S. Economic Reports Keep the Fed Hawkish” Barchart, 15 Feb. 2023,

4. “Hot Retail Sales Join Hot Jobs Data—How Will the Fed Respond?” The Ticker Tape, 15 Feb. 2023,–19393

5. “Stock market news today: Stocks fall after strong retail sales data” AOL, 15 Feb. 2023,

6. “US stocks fall after hot retail sales report suggests higher interest rates for longer” Business Insider Africa, 15 Feb. 2023,

7. “S&P 500, Nasdaq, Dow end choppy session with mixed performance after CPI data (SP500)” Seeking Alpha, 14 Feb. 2023,