U.S. stocks fall on U.S. consumers' relentless spending

U.S. equity indexes opened lower after data showed that U.S. retail sales in January jumped by the most in almost two years.

The 3 per cent month-over-month gain suggested that strong consumer spending will keep prices elevated, which could increase pressure on the Federal Reserve to step up its efforts to tamp down inflation. And U.S. homebuilder sentiment increased in February by the most since mid-2020, as easing mortgage rates over the past several months have boosted the housing market.

“The biggest concern that we’re going to have when we go forward here is the uncomfortable question of maybe the Fed is not as sufficiently restrictive,” said Jim Bianco, founder of Bianco Research, said on Bloomberg TV. “The assumption behind all the recession calls at the beginning of the year was we’ve raised rates a lot, that’s got to hurt. But maybe it doesn’t. Maybe all we’ve done is gone to neutral and that’s what the market’s starting to sniff out.”

Investors were still mulling Tuesday’s U.S. consumer price index data and what it means for the U.S. economy.