US stocks fall after hot retail sales report suggests higher interest rates for longer

• US stocks dropped on Wednesday after a strong retail sales report suggested higher interest rates for longer.
• Retail sales jumped 3% in January, reversing a two-month slump in November and December.
• The retail sales report showed the biggest spending increase since March 2021.

US stocks dropped on Wednesday after a hotter-than-expected retail sales report suggested to investors that interest rates might stay higher for longer.

Retail sales in January surged 3%, which was well above economist estimates of 1.8% and represented the biggest monthly gain for retail sales since March 2021.

The strong retail sales report sparked a surge in interest rates and suggests an economic recession may be farther away than most expect. That could lead the Federal Reserve to hike interest rates more than expected, and to keep them higher for longer to ensure that inflation doesn't rebound.

Here's where US indexes stood shortly after the 9:30 a.m. ET open on Wednesday:

• S&P 500: 4,116.38, down 0.48%
• Dow Jones Industrial Average: 33,915.52, down 0.51% (173.75 points)
• Nasdaq Composite: 11,930.65, down 0.25%

Here's what else is happening this morning:

• Quarterly 13F filings are being released, showing what some of the world's biggest investors were doing with their money in the final three months of 2022. Warren Buffett's Berkshire Hathaway, short-seller Jim Chanos, and Michael Burry were all being watched by investors.
• Reddit is reportedly reviving plans to go public, but it's unlikely to be worth as much as the $15 billion valuation target it once hoped for.
• Elon Musk donated nearly $2 billion worth of Tesla stock to charity last year, according to a SEC filing.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil fell 0.76% to $78.46 per barrel. Brent crude, oil's international benchmark, dropped 0.77% to $84.92.
• Gold fell 1.07% to $1,845.70 per ounce.
• The yield on the 10-year Treasury rose three basis points to 3.78%.
• Bitcoin jumped 2.60% to $22,667, while ether jumped 1.77% to $1,574.