Overnight US stocks | CPI data scares off interest rate cut expectations, China Golden Dragon index closes up 2.7%. Alibaba Group Holding Limited Sponsored ADR (BABA.US) gains nearly 5%.

On Wednesday, the three major indexes rose and fell unevenly, with U.S. January CPI higher than expected, showing increased inflationary pressures, prompting economists to lower their expectations for the Fed's rate cuts. [US Stocks] As of the close, the Dow Jones closed down 225.09 points, or 0.50%, at 44,368.56 points; the Nasdaq rose 6.09 points, or 0.03%, to 19,649.95 points; the S&P 500 fell 16.53 points, or 0.27%, to 6,051.97 points. Amazon.com, Inc. (AMZN.US) and NVIDIA Corporation (NVDA.US) both fell by over 1%, while Tesla, Inc. (TSLA.US) rose 2.4%. The Nasdaq Golden Dragon Index closed up 2.7%, Alibaba Group Holding Limited Sponsored ADR (BABA.US) rose nearly 5%, reaching a new high since July 2022. [European Stocks] The Germany DAX30 index rose 108.39 points, or 0.49%, to 22,142.52 points; the UK FTSE 100 index rose 27.87 points, or 0.32%, to 8,805.26 points; the France CAC40 index rose 15.23 points, or 0.19%, to 8,044.13 points; the Euro Stoxx 50 index rose 12.94 points, or 0.24%, to 5,403.85 points; the Spain IBEX 35 index rose 143.10 points, or 1.12%, to 12,909.00 points; the Italy FTSE MIB index fell 44.05 points, or 0.12%, to 37,538.00 points. [Asia-Pacific Stock Market] The Nikkei 225 index rose 0.42%, the Korea KOSPI index rose 0.37%, and the Indonesia Jakarta Composite index rose 1.74%. [Cryptocurrency] Bitcoin fell to a low of $94,121, down 2.3% at one point. As of writing, Bitcoin has risen 1.79%, returning to above $97,000. [Gold] In New York's late trading, spot gold rose 0.20% to $2,903.49 per ounce, dropping to $2,864.21 per ounce one minute after the release of US CPI data at 21:30 Beijing time before rebounding. COMEX gold futures fell 0.18% to $2,927.30 per ounce, spending most of the day in decline and hitting a low of $2,886.50 at 21:31, before rising to $2,936.50 at 01:14 (near the end of Fed Chair Powell's testimony). [Oil] Intercontinental Exchange, Inc.'s Brent crude oil futures for April delivery fell $1.09, or 1.42%, to $75.91 per barrel. New York Mercantile Exchange's WTI crude oil for March delivery fell $1.14, or 1.55%, to $72.18 per barrel. [Dollar] In late New York trading, the ICE US Dollar Index was roughly flat at 107.936 points, rising significantly after the release of US CPI data at 21:30 Beijing time, hitting a daily high of 108.523 points before giving back gains, and then hitting a daily low of 107.627 points as Powell's hearing ended. The Bloomberg Dollar Index rose 0.11% to 1,301.44 points, trading in a range of 1,298.17-1,306.57 points. [Macro News] US January inflation unexpectedly rose, supporting a slow Fed rate cut. The year-on-year inflation rate in the US for January unexpectedly rose to 3%, with economists expecting it to stabilize at the December 2.9% level. This supports the Fed's slow move towards a rate cut and hits the stock market and government bonds. The month-on-month increase for January also exceeded expectations at 0.5%, higher than the expected 0.3%. Following the data release, both government bonds and stock index futures saw significant selloffs. The two-year US Treasury yield, closely tied to rate expectations, jumped to 4.37%. S&P 500 index futures and Nasdaq futures both fell by over 1%. Fed Chair Powell warns against overinterpreting CPI data. Fed Chair Powell warned on Wednesday not to overinterpret the data showing the biggest monthly increase in the Consumer Price Index (CPI) in over a year, while also acknowledging that the reading was significantly higher than expected. Powell stated during a House Financial Services Committee hearing: "The CPI reading was almost universally higher than all estimates, but I just want to make two points. First, we don't get too excited over one or two good readings, nor do we get too excited over one or two bad readings. Second, our inflation target focuses on the Personal Consumption Expenditures (PCE) price index, as we believe it is a better measure of inflation. So you need to know how CPI translates to PCE, and tomorrow we will get more data related to that from the Producer Price Index (PPI). Later this evening, we will know how the PCE reading turns out. US budget deficit for the first four months of FY2025 reaches $840 billion. The US federal budget deficit ballooned to a record $840 billion in the first four months of the fiscal year, driven by increased spending in areas such as healthcare, social security, and debt interest payments. The Treasury Department stated that the deficit increased by $129 billion just in January. Adjusted for calendar differences, the cumulative deficit from October to January expanded by 25%. A senior Treasury official stated that the 2024 figure was inflated by deferred tax payments related to natural disasters in 2023. Spending in the past four months totaled $2.44 trillion, up 7% after calendar adjustments. Altman announces that OpenAI will soon release a new GPT-4.5 model. OpenAI CEO Sam Altman stated in a series of posts on the social network X on Wednesday that the model, internally referred to as Orion, will be released in "a few weeks." A Bloomberg report in November stated that Orion had not yet met the performance expectations of OpenAI. GPT-4.The release of 5 will mark the end of an era for OpenAI. Altman stated that this model will be the company's final model that does not use additional computing power to mimic human reasoning. OpenAI has adopted reasoning models in some of its newer models, including o1 and o3. In addition to Altman's statement, an OpenAI spokesperson declined to comment.Individual stock news Cisco Systems, Inc. (CSCO.US) is optimistic about revenue outlook this quarter, with demand for artificial intelligence boosting enterprise network spending. Network equipment giant Cisco Systems, Inc. is optimistic about revenue outlook this quarter, benefiting from increased spending on computational infrastructure by enterprises looking to leverage AI technology. Cisco Systems, Inc. announced its financial report after the market closed on Wednesday, stating that revenue for the fiscal quarter ending in April is expected to be between $13.9 billion and $14.1 billion. Analysts had previously predicted the lower end of this range. Cisco Systems, Inc. also raised its revenue target for fiscal year 2025 by about $1 billion, to over $56 billion, with the average estimate at $55.97 billion. Cisco Systems, Inc. stock rose by approximately 6% in after-hours trading. Enterprise customers have been increasing their investments in network equipment to help accelerate AI deployments. Cisco Systems, Inc.'s revenue outlook suggests that these customer expenditures will help offset weak federal government orders. Intel Corporation (INTC.US) rises, Baird says the company may joint venture with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Intel Corporation continued its upward trend on Wednesday, with a cumulative increase of 16% over the past three days. A report from Baird suggests that the U.S. government may be involved in a plan involving Intel Corporation and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will dispatch engineers to Intel Corporation's 3-nanometer/2-nanometer wafer fab, leveraging their expertise to ensure the viability of the wafer fab and Intel Corporation's subsequent manufacturing projects. Intel Corporation may spin off the wafer fab to create a joint venture company with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR overseeing operations and receiving funding from the U.S. chip act. Analyst Tristan Gerra wrote that while this news has not been confirmed and will take a long time to complete, the project has its merits. Baird rates Intel Corporation stock as neutral with a target price of $20. Large brokerage rating Oppenheimer: Raises target price for Uber Technologies, Inc. (UBER.US) from $85 to $100