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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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Futures down: Dow 0.91%, S&P 500 0.96%, Nasdaq 1.02%

(Updates before markets open)

By Shashwat Chauhan and Sukriti Gupta

Feb 12 (Reuters) -

Wall Street's main indexes were set to drop at the open on

Wednesday, as a hotter-than-anticipated inflation reading added

to concerns that the Federal Reserve would not cut interest

rates anytime soon.

A Labor Department

report

showed the consumer price index rose 3% on an annual basis

in January, versus the 2.9% increase forecast by economists

polled by Reuters. On a monthly basis, the index rose 0.5%,

compared with an estimated 0.3% rise.

The core figure, which excludes volatile food and energy

components, rose 0.4% on a monthly basis against an expectation

of a 0.3% advance. Annually, it came in at 3.3%, versus an

estimated 3.1% increase.

"It's now calling into question not only whether or not

the Fed will cut in the second half of this year ... but now it

puts on the table potentially the next move even being one to

the upside for rates," said Alex Coffey, senior trading

strategist at Charles Schwab.

"It brings all options back to the table and likely

pushes out even further that discussion of rate cuts."

Traders are now fully pricing in just one more 25 basis

point rate reduction this year. Before the data, they saw an

about 40% chance of another similar-sized move, as per LSEG

data.

Fed Chair Jerome Powell also begins his second day of

testimony before Congress shortly after trading commences on

Wednesday.

On Tuesday, Powell had reiterated that the U.S. central bank

is in no rush to cut its short-term interest rate again, while

refraining from commenting on the impact of U.S. President

Donald Trump's tariff policies.

January's reading is the last inflation reading before any

direct impact from Trump's tariff measures, which went into

effect this month.

Trump had slapped an additional 10% tariff on Chinese goods

last week and levied tariffs on all steel and aluminum imports

on Monday.

His trade advisers are also finalizing plans for the

reciprocal tariffs on every country that charges duties on U.S.

imports.

The yield on the 10-year Treasury note rose

sharply after the data, touching its highest level in over two

weeks.

At 8:46 a.m. ET, Dow E-minis were down 408

points, or 0.91%, S&P 500 E-minis were down 58 points,

or 0.96% and Nasdaq 100 E-minis were down 223 points, or

1.02%.

Futures for economically-sensitive Russell 2000 smallcap

index dropped 1.6%.

Among individual movers, Lyft ( LYFT ) dropped 13.1% after

the ride-hailing company forecast current-quarter gross bookings

below estimates. Bigger rival Uber ( UBER ) also fell 2.5%.

Super Micro Computer ( SMCI ) advanced 11.1% after the

server maker said it believes it will be able to file delayed

annual and quarterly reports with the U.S. Securities and

Exchange Commission by February 25.

CVS Health ( CVS ) advanced 9.6% after the healthcare

conglomerate beat fourth-quarter profit estimates, while

DoorDash ( DASH ) gained 5% as the online delivery firm topped

analysts' estimate for quarterly revenue and total orders.