Inflation cooled more than expected in January, and growth-sensitive stocks quickly caught a bid.

The annual rate of consumer-price inflation slowed to 2.4%, down from 2.7% in December and below economist expectations of 2.5%.

The print marked the lowest inflation reading since May 2025, reinforcing the narrative that price pressures are gradually easing at the start of the year.

On a monthly basis, headline CPI rose 0.2%, undershooting both December's 0.3% increase and consensus estimates.

Notably, core inflation, which excludes food and energy, also edged lower on an annual basis, slipping to 2.5% from 2.6% in December. That marked the lowest core reading since March 2021 and came in line with forecasts.

Month over month, core CPI ...