us stocks maintained sharp gains tuesday after february inflation data matched estimates and suggested pressure on prices continued to cool easing inflation data could allay wall street worries about steeper upcoming interest rate hikes from the federal reserve at a time when the banking sector is regaining its footing following the collapse of two regional banks stocks ended a choppy session mostly lower monday as bank shares plunged the dow extended a losing streak to five sessions falling around 91 points or 03 while the sp 500 lost 02 and the nasdaq composite hung on to a 05 gain tuesday is juxtaposing inflation and price stability with financial stability in the minds of investors for now the mix of data and market conditions could be clearing the chance for a smaller interest rate hike than traders were recently expecting februarys consumer price index came in largely at expectations the cost of living stood at 6 year over year down from 64 a month earlier stripping out food and energy prices the core cpi number was up 55 year over year ticking down from the 56 print in january the 6 headline number is the lowest since september 2021 the inflation data comes while the dust is settling in the banking sector the failure of silicon valley bank sivb and signature bank sbny days ago has rattled the global financial sector stocks of americas regional banks which have been under pressure showed a bounce in early trading tuesday the spdr sp regional banking etf kre and the invesco kbw regional banking etf kbwr are both up 5 both etfs are off more than 10 year to date due to recent drops and the invesco etf is off nearly 20 in fact all 11 of the sp 500s sectors traded up led by communication services and energy stocks while the dow was on track to break a fiveday losing streak todays rebound is being driven by the relief in that systemic issues seem to be subsiding said matt peron director of research at janus henderson investors on top of that the cpi numbers were in line perhaps slightly better as the shelter numbers we know are stale and the real time numbers are more benign theres still a ways to go on inflation but the market is likely going to find some nearterm support on the cooling inflation number he said that said we remain cautious in the intermediate term as earnings expectations and valuations are still a bit too high peron added the sp 500 remains within  though now towards the bottom  of the 3800 to 4200 range it has inhabited for four months or so supported by hopes the banking angst will be ameliorated by a consequently less hawkish federal reserve but what does it all mean for the highstakes guessing game where interest rates will go there might be some hope the february data  combined with the interest rate pressures on banks  could convince the fed to stop rate hikes all together other market observers are split on the idea and say a 25 basis point increase could be the more likely result theres a more than 86 chance of a quarterpoint basis point increase to the federal funds rate according to cme groups fedwatch tool ahead of the silicon valley bank fallout the emerging debate was a 25 basis point or 50 basis point increase to the federal funds rate february inflation data probably doesnt ease or complicate the feds price stability versus financial stability dilemma while not a great reading with headline consumer prices rising broadly in line with expectations the fed can take a 50bps hike firmly off the table said seema shah chief global strategist at principal asset management services inflation is still hot said andrew patterson senior international economist at vanguard the fed still has work to do and their actions and communications are going to come under increasing scrutiny given the events of the past few days they need to be careful in balancing the risks of price and financial stability mark newton head of technical strategy at fundstrat noted that there was welcome strength in big technology and healthcare stocks on monday as financials struggled but that with us retail sales data also due wednesday investors should brace for volatility retail sales jumped 3 in january the forecast for february is a monthly decline of 04 this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal