(Reuters) – U.S. stocks rose on Wednesday as investors digested a stronger-than-expected inflation data and a surprise drop in January retail sales, which shifted the focus from rising inflation to the prospect of stagflation.

The Labor Department’s core Consumer Price Index, which excludes the volatile food and energy components, increased 0.3 percent in January, while economists polled by Reuters had forecast an increase of 0.2 percent. However, the year-on-year rise was unchanged at 1.8 percent.

The data again raised the specter of rising inflation and rekindled fears that the Federal

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