US STOCKS-S&P 500 falls as hot inflation data hints at fewer rate cuts

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CVS Health (CVS) rises after beating profit estimates

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Lyft (LYFT) falls as Q1 bookings forecast misses estimates

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January CPI at 3% YoY vs 2.9% estimate

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S&P 500 -0.30%, Nasdaq -0.01%, Dow -0.48%

(Updates with details of afternoon trading)

By Noel Randewich and Shashwat Chauhan

Feb 12 (Reuters) -

The S&P 500 dipped on Wednesday as a hotter-than-expected U.S. inflation reading added to worries that the Federal Reserve would not cut interest rates anytime soon, while CVS Health (CVS) and Gilead Sciences (GILD) rallied after upbeat quarterly reports.

Nvidia (NVDA) lost 6% and Amazon (AMZN) dropped almost 1%, with the two AI computing heavyweights pulling down the S&P 500.

U.S. consumer prices increased in January by the most in nearly a year and a half, reinforcing the Fed's message that it was in no rush to resume cutting rates.

The surge in prices offered a cautionary note to President Donald Trump's push for tariffs on imported goods, which economists have panned as inflationary.

Interest rate futures now suggest traders see about a 70% chance the Fed will reduce rates by another 25 basis points by the end of 2025, down from about an 80% chance on Tuesday, according to CME Fedwatch.

"The market is digesting that the Fed may not cut at all. That's why the stock market is down, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

CVS Health (CVS) surged 16% after the healthcare conglomerate beat fourth-quarter profit estimates, hinting at improved performance under new CEO David Joyner.

Gilead Sciences (GILD) jumped 6% after the biotech company forecast 2025 earnings above analyst estimates.

Fed Chair Jerome Powell also began his second day of testimony before Congress on Wednesday. On Tuesday, he reiterated to the Senate Banking Committee that the U.S. central bank was in no rush to cut rates again.

January's reading is the last inflation reading before any direct impact from Trump's tariff measures, which went into effect this month.

Trump's trade advisers are finalizing plans for the reciprocal tariffs on every country that charges duties on U.S. imports.

The Cboe Volatility Index, known as Wall Street's "fear gauge," jumped to its highest in a week, last at 15.9 points.

The S&P 500 was down 0.30% at 6,050.16 points.

The Nasdaq declined 0.01% to 19,642.21 points, while the Dow Jones Industrial Average was down 0.48% at 44,379.81 points.

Of the 11 S&P 500 sector indexes, nine declined, led lower by energy, down 2.31%, followed by a 0.76% loss in real estate.

The economically sensitive Russell 2000 small cap index dropped 0.85%.

Treasury yields shot up after the inflation data, with the one on the 10-year note hitting its highest in over two weeks.

Lyft (LYFT) dropped 6% after the ride-hailing company forecast current-quarter gross bookings below estimates.

Shares of Robinhood Markets (HOOD) rallied 5% ahead of the stock trading app's quarterly report after the bell.

Declining stocks outnumbered rising ones within the S&P 500 by a 2.7-to-one ratio.

The S&P 500 posted 21 new highs and 22 new lows; the Nasdaq recorded 64 new highs and 197 new lows.

(Reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and David Gregorio)