Forget about those March rate cuts from the Fed.

The big picture: Expectations that the Fed could declare victory over inflation and quickly pivot to cutting rates was a key driver behind last year's stellar 24% gain for the S&P 500.

• That borderline giddy markets mood is giving way to a more Missouri-style, show-me sensibility, as recent economic data — including Tuesday's CPI numbers — have remained stubbornly hot.

Zoom in: The upshot is that market-derived odds that the Fed would cut rates at its March meeting — charted above — have dwindled from 90% in December, with the U.S. disinflation at its most immaculate — to 9% on Tuesday.

• For what it's worth, the Fed funds futures market — where we get those odds — is still putting a better than 60% chance that the Fed cuts at its May meeting, but those are falling fast, too.

Details: Tuesday's hotter-than-expected inflation numbers received a fairly predictable reception in the markets as yields on government bonds rose. The 10-year Treasury note is now up to 4.27%, its highest level this year.

• Higher yields threw a bit of cold water on stocks. The S&P and Nasdaq both fell more than 1%, on their second worst day of 2024 so far.

What they're saying: "Today's CPI print and the subsequent reaction in stocks is yet another demonstration of how equities are now trading at the mercy of interest rates. We expect this behavior to persist," wrote Michael Kantrowitz, chief investment strategist at brokerage firm Piper Sandler.

💭 Matt's thought bubble: As the father of a strong-willed 6-year-old, I feel like I can recognize an incipient tantrum.

• As we've written before, the market could start stamping its foot — i.e. selling off — if investors don't soon get the rate cuts they want.