U.S. stocks finished mixed in back-and-forth trading Tuesday afternoon as Wall Street weighed the implications of hotter-than-expected January inflation data on the path forward for interest rates.

The S&P 500 (^GSPC) finished just below the flatline, while the Dow Jones Industrial Average (^DJI) shed about 150 points, or 0.4%. The technology-heavy Nasdaq Composite (^IXIC) rose 0.6%. All three averages pared bigger losses from early in the session. Treasury yields rose, with the benchmark 10-year note climbing roughly 4 basis points to about 3.76%.

The January Consumer Price Index (CPI) released by the Bureau of Labor Statistics Tuesday morning showed prices rose 0.5% in the first month of the year, and 6.4% on an annual basis, more than economists expected.

Core CPI, which strips out the volatile food and energy components of the report, climbed 0.4% over the prior month and 5.6% year-over-year, also higher than forecast.

Bloomberg consensus estimates called for a 6.2% rise in CPI over the year and jump 0.5% month-over-month. New seasonal adjustments released by the BLS on Friday also switched December's initial reading of a 0.1% monthly drop in headline inflation to an increase of 0.1% in the year's final month. Forecasts called for a 5.5% annual increase and 0.4% monthly rise in the core CPI reading.

"While there were no major surprises in today’s CPI reading, it is a reminder that while inflation has peaked it could be a while before we see it moderate to normal levels," Morgan Stanley Global Investment Office head of model portfolio construction Mike Loewengart said in a note.

"The question remains if inflation will be able to fall to the Fed’s target levels with the labor market as tight as it currently is," Loewengart added. "That could be the recipe for a soft landing, but it remains to be seen when the Fed will shift away from rate hikes and if the labor market will lose its resiliency."

"If you look at the 12-month change, we saw some pretty hefty inflation. It's down substantially from the peak, and we'll probably see inflation continue to moderate as the year goes on. But even by year-end, optimistically, inflation is still going to be up 3%, maybe 3.5% from a year and a half ago," Cumberland Advisors chief U.S. economist David W. Berson told Yahoo Finance Live Monday.

"My guess is the Fed will not ease this year — it may not tighten much more, we might see Fed funds at the peak go a little above 5% — but that's very different from an expectation that by year-end the Fed will ease."