US and European stock markets mostly fell Thursday as the latest bout of indicators appeared to dent expectations the Federal Reserve might soon cut interest rates.
Earlier, Paris struck an all-time peak above 8,200 points and Frankfurt reached a new summit past 18,000, but both were later pulled down by Wall Street with Paris ending only slightly higher and Frankfurt closing with a loss.
“US producer price data surprised on the upside, which is adding to fears that inflation pressures are building, and central banks may not be able to cut interest rates as fast as predicted,” said Kathleen Brooks, research director at XTB.
US shares had hit record highs Monday, but have largely churned sideways this week as investors digested a mixed bag of economic reports ahead of a key Federal Reserve meeting next week.
The United States reported Thursday that retail sales bounced 0.6 percent last month, but that came after a steep slide in January, and taken together the numbers did not suggest an overly hot economy.
But more worryingly, data showed that US producer prices rose 0.6 percent in February, above market expectations of 0.3 percent. That report followed news earlier in the week that consumer prices had also risen more than expected.
“With less than a week until the next Federal Reserve meeting, data early Thursday reinforced ideas that inflation remains hotter than the central bank might like,” said Charles Schwab analyst Joe Mazzola.
The US Federal Reserve meets March 19-20, though most investors do not expect the central bank to begin lowering interest rates until its June meeting.
US Steel shares fell 1.5 percent after President Joe Biden, as expected, said he opposed its sale to Japan’s Nippon Steel. The shares are down around 15 percent this week.
In Europe, prices were initially boosted as recent comments from the European Central Bank that seemed to lead investors to also price in a rate cut in June. But the hesitant mood on Wall Street soon carried over to Europe, and shares fell back.
Elsewhere, bitcoin hit a fresh record high at $73,797 and oil reached its highest levels since November.
Oil prices were boosted by International Energy Agency forecasts that demand would grow higher than expected, combined with reports earlier this week that US stockpiles have fallen.
“Oil investors are expecting strong demand from China while the ongoing supply cuts by the OPEC+ means there is the potential for a supply deficit.” said Fawad Razaqzada, analyst at City Index.
Investors are keeping tabs on China-US tensions after the House of Representatives overwhelmingly approved a bill that would force TikTok’s Chinese owner, ByteDance, to divest from the company or see the platform banned in the United States.
Former US treasury secretary Steven Mnuchin on Thursday said he is putting together a team of investors to buy TikTok.
China has warned a forced sale will “inevitably come back to bite the United States”.
– Key figures around 1640 GMT –
New York – Dow: DOWN 0.2 percent at 38,972.10 points
New York – S&P 500: DOWN 0.2 percent at 5,153.50
New York – Nasdaq Composite: DOWN 0.2 percent at 16,141.52
Paris – CAC 40: UP 0.3 percent at 8,162.42 (close)
Frankfurt – DAX: DOWN 0.1 percent at 17,942.04 (close)
EURO STOXX 50: DOWN 0.2 percent at 4,99312 (close)
London – FTSE 100: DOWN 0.4 percent at 7,743.15 points (close)
Tokyo – Nikkei 225: UP 0.3 percent at 38,807.38 (close)
Hong Kong – Hang Seng Index: DOWN 0.7 percent at 16,961.66 (close)
Shanghai – Composite: DOWN 0.2 percent at 3,038.23 (close)
Dollar/yen: UP at 148.16 yen from 147.78 yen on Wednesday
Euro/dollar: DOWN at $1.089 from $1.0952
Pound/dollar: DOWN at $1.2754 from $1.2799
Euro/pound: DOWN at 85.39 pence from 85.54 pence
West Texas Intermediate: UP 1.7 percent at $81.05 per barrel
Brent North Sea Crude: UP 1.3 percent at $85.15 per barrel
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