The US stock markets fell and the dollar gained on Wednesday as US consumer inflation surged to its highest since 1990, raising concerns the Federal Reserve will hike rates sooner than expected.

Share Market Live

NSE

Gold prices hit a five-month high, bolstering the metal's appeal as a hedge against inflation. Real yields on US Treasuries slid to record lows after the Labor Department reported a big jump in the consumer price index in October.

The US Consumer Price Index (CPI) rose 0.9 percent on a monthly basis after rising 0.4 percent in September as the largest gain in four months boosted the annual increase to 6.2 percent. It was the biggest year-on-year rise since November 1990 and followed a 5.4 percent leap in September.

Wall Street's so-called fear gauge, CBOE Volatility index, touched its highest level in nearly one month.

MSCI's all-country world index slid 0.71 percent as a decline on Wall Street accelerated. But the broad STOXX Europe 600 index rose 0.22 percent to end at a record closing high following strong earnings from the media and energy sectors.

STOXX 600 listed companies profits are expected to jump 60.7 percent in the third quarter to 104.4 billion euros ($120.7 billion) from a year earlier, according to a Reuters report citing new Refinitiv data.

The Dow Jones Industrial Average fell 0.66 percent, the S&P 500 slid 0.82 percent and the Nasdaq Composite declined 1.66 percent as the big US megacap names led the downturn. Growth stocks fell 1.26 percent but value shares just 0.29 percent.

Despite the slide on Wall Street the US economy is booming and corporate pricing power is resilient, which means revenues can grow and lift profits too, the report said.

The dollar jumped on the CPI data, with the euro hitting a 16-month low against the greenback.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.914 percent to 94.886. The euro fell 0.97 percent at $1.1479, while the yen gained 0.95 percent at $113.9200.

The Treasury breakeven inflation curve, a measure of what inflation level an investor would break even with on a given Treasury note yield, shows investors expect inflation to run at 4.72 percent in the coming year, before declining to 3.59 percent in two years, 3.14 percent in five years and 2.67 percent in 10 years.

The yield on benchmark 10-year US Treasury notes rose 11.4 basis points to 1.5630 percent in late trade on Wednesday, after touching a six-week low of 1.4150 percent on Tuesday.

Euro zone bond yields also ticked up, with Germany's 10-year yield, the benchmark for the bloc, up 4 basis points at -0.243 percent, above a seven-week low of -0.299 percent touched on Tuesday.

Oil prices slumped, hit by the surging dollar, after President Joe Biden said the US administration was looking for ways to reduce energy costs amid a broader surge in inflation.

Brent crude fell $2.14 to settle at $84.64 a barrel. US crude lost $2.81 to settle at $81.34 a barrel.

US gold futures settled 1 percent higher at $1,848.30 an ounce.

Bitcoin declined 1.64 percent to $65,844.

-With agency inputs

First Published:Nov 11, 2021 7:23 AM IST