Consumer Price Index showed an acceleration to 2.9%, the highest rate since July. With such high inflation, the Fed is unlikely to cut rates in January.

Traders are feeling more confident that the Federal Reserve will cut interest rates this year after a key inflation gauge came in cooler than expected. Core consumer prices, which exclude volatile food and energy categories,

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.