us stocks were trimming losses on tuesday afternoon with the nasdaq composite ticking into positive territory as januarys consumer price index data revealed a seventh straight month of slowing inflation but not as quickly as economists had expected on monday the dow jones industrial average rose 377 points or 111 to 34246 the sp 500 increased 47 points or 114 to 4137 and the nasdaq composite gained 174 points or 148 to 11892 the nasdaq composite is up 13 so far in 2023 but remains roughly 25 off its record high touched in november 2021 and its 16 year over year the january consumer price index showed the cost of living rising 05 month over month and falling to a 64 yearly rate down from 65 in december the core cpi taking away volatile food and energy prices fell to 56 from 57 for the year see cpi shows us inflation still sticky in january economists were forecasting that the headline annual cpi inflation rate was going to drop to 62 year over year the consensus was for a core reading of 54 on an annual basis the monthonmonth readings were expected to be up 04 compared to minus 01 in december and the core unchanged at 03 after the report dallas federal reserve president lorie logan said she expected the central bank to keep nudging the benchmark rate higher but logan did not want the fed to lock in a peak interest rate or how to get there she noted in a speech at prairie view am university also tuesday richmond federal reserve president tom barkin said inflation is cooling albeit slowly i think there is going to be a lot more inertia a lot more persistence that maybe we dont want barkin said in a bloomberg television interview the fed raised the federal funds rate by 25 basis points earlier this month bringing the benchmark rate to a range of 45 to 475 the odds of a 25 basis point increase in may and june increased tuesday morning after the january inflation inflations slow stubborn decline has investors wondering how much higher the federal reserve will go with interest rates the disinflation of recent months has encouraged investors to hope the federal reserve can soon stop raising interest rates thereby allowing the economy to avoid a sharp contraction and thus support corporate earnings this narrative has helped lift the sp 500 by 78 so far this year but the rosy narrative is ringing hollow in the face of stubbornly high prices jennifer desisto chief investment officer at anchor capital advisors said in an interview some investors might have been hoping for inflation to ebb away faster  something that wouldve pushed the fed to back away from more rate hikes i think the market had this view that inflation would be falling faster  this is kind of catching them off guard at this point desisto said the strength of core inflation suggests that the fed has a lot more work to do to bring inflation back to 2 said maria vassalou goldman sachs asset managements cochief investment officer of multiasset solutions if retail sales also show strength tomorrow the fed may have to increase their funds rate target to 55 in order to tame inflation vassalou said us january retail sales data are due out wednesday morning and us consumers are projected to spend 13 more month over month according to numerator a consumer data analytics and tech company but ellen zentner chief us economist at morgan stanley said without worsening inflationary pressures in todays report the fed will see more evidence accumulating that inflation is decelerating despite a stronger than anticipated labor market zentner expects the fed to add another 25 basis point in may and after that the central bank will be largely set after may a slowing labor market and more moderate inflation outcomes should set the stage for a stop in the tightening cycle and an eventual first rate cut in december zentner said meanwhile the corporate earnings reporting season is drawing to a close with most reports in earnings for sp 500 index companies were down about 20 during the last three months of 2022 the first decline since the third quarter of 2020 most companies beat analysts forecasts but the share of negative surprises rose