Global stocks advance as oil retreats before US inflation data
European and Asian shares gained while traders priced in a near-certain December rate increase by the Federal Reserve.
US yields rise and stocks fall as inflation strengthens case for larger Fed hike
October consumer prices rose 0.4%, exceeding economists’ forecasts, while core inflation also came in above expectations.
US government bond yields rose and Wall Street shares declined after October inflation exceeded forecasts, increasing expectations that the Federal Reserve could raise interest rates by half a percentage point in December. The dollar strengthened, while gold prices fell.
Official data showed consumer prices increased 0.4% in October, compared with economists’ forecast of 0.3% and September’s 0.6% rise. Excluding food and energy, core inflation was 0.3%, above the 0.2% consensus.
Fed Governor Christopher Waller had said earlier in London that an October core inflation reading of 0.3% would lead him to consider a half-point increase at the December 8-9 meeting. Dallas Fed President Lorie Logan separately said at least two additional quarter-point increases were needed to reduce inflation.
The November 10 market figures showed the 2-year Treasury yield up 19.28 basis points at 4.74%. The benchmark 10-year yield increased 12.76 basis points to 4.988%. The Dow Jones Industrial Average lost 0.57% to 52,087.13, while the S&P 500 declined 0.71% to 7,496.63. The Nasdaq Composite dropped 0.90% to 25,025.83.
Outside the United States, MSCI’s global stock gauge slipped 0.21% to 1,106.21, but Europe’s STOXX 600 gained 0.4%. The dollar index advanced 0.6% to 102.29. Spot gold fell 2.3% to $4,043.73 an ounce.
Oil reached fresh two-month lows after US officials played down the need for further military action against Iran. US crude declined 1.39% to $85.67 a barrel, while Brent fell 2.03% to $90.69 per barrel.