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US stocks were largely lower on Wednesday as investors digested a hotter-than-expected January inflation reading and investors pared back bets on Federal Reserve interest rate cuts in 2025.

The Dow Jones Industrial Average ( ^DJI ) dropped 0.5%, while the benchmark S&P 500 ( ^GSPC ) slipped nearly 0.3%. The tech-heavy Nasdaq Composite ( ^IXIC ) finished just above the flatline.

The Consumer Price Index (CPI) out Wednesday showed headline consumer inflation rose more than forecast in January. "Core" prices — which strip out the more volatile costs of food and gas — reversed the previous month's easing, up 0.4% over last month and 3.3% over last year, with both rates higher than in December.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

The surprise inflation print pushed back investor bets on interest-rate cuts in 2025. As of Wednesday, traders were pricing just one interest-rate cut , after pricing in two for most of the year. The 10-year Treasury yield ( ^TNX ) added 10 basis points to hit just shy of 4.64%, its highest level in more than two weeks, following the inflation data.

A fresh batch of earnings provided some clues to Corporate America's resilience. Kraft Heinz ( KHC ) shares slid after the packaged food maker's 2025 profit outlook fell short. But CVS Health ( CVS ) stock got a boost as investors welcomed a smaller drop in quarterly profit than expected.