- Israel warns south Lebanon residents to 'not return'
- Sinner tames Machac to reach Shanghai Masters final
- Buried Nazi past haunts Athens on liberation anniversary
- Harris to release medical report confirming fitness for presidency: campaign
- Nobel prize a timely reminder, Hiroshima locals say
- Hezbollah fires at Israel as wars rage on Yom Kippur
- Analysts warn more detail needed on new China economic measures
- China tees up fresh spending to boost ailing economy
- China says will issue special bonds to boost ailing economy
- China offers $325 bn in fiscal stimulus for ailing economy
- Dodgers drop Padres 2-0 to advance in MLB playoffs
- Alexei Navalny wrote he knew he would die in prison in new memoir
- Last-minute legal ruling allows betting on US election
- Despite hurricanes, Floridians refuse to leave 'paradise'
- Israel observes Yom Kippur amid firestorm over Lebanon strikes
- Trump demonizes migrants in dark, misleading speech
- X says 'alert' to manipulation efforts after pro-Russia bots report
- US, European markets rise before Boeing unveils sweeping job cuts
- Small Quebec company dominates one part of NHL hockey: jerseys
- Comoros shock Tunisia, Salah, Mbeumo strike in AFCON qualifiers
- Boeing to cut 10% of workforce as it sees big Q3 loss
- Germany win in Nations League as 10-man Dutch rescue point
- Undav brace sends Germany to victory against Bosnia
- Israel says fired at 'threat' near UN position in Lebanon
- Want to film in Paris? No sexism allowed
- Ecuador's last mountain iceman dies at 80
- Milton leaves at least 16 dead, millions without power in Florida
- Senegal set to announce breakaway development agenda: PM
- UN says 2 peacekeepers wounded in south Lebanon explosions
- Injury-hit Australia thrash 'embarrassing' Pakistan at Women's T20 World Cup
- Internal TikTok documents show prioritization of traffic over well-being
- Israel says fired at 'immediate threat' near UN position in Lebanon
- New US coach Pochettino hails Pulisic but worries over workload
- Brazil orders closure of 2,000 betting sites
- UK govt urged to raise pro-democracy tycoon's case with China
- Sculptor Lalanne's animal creations sell for $59 mn
- From Tesla to Trump: Behind Musk's giant leap into politics
- US, European markets rise as investors weigh rates, earnings
- In Colombia, children trade plastic waste for school supplies
- Supercharged hurricanes trigger 'perfect storm' for disinformation
- JPMorgan Chase profits top estimates, bank sees 'resilient' US economy
- Djokovic proves staying power as he progresses to Shanghai semi-finals
- Sheffield Utd boss Wilder 'numb' after Baldock death
- Little progress at key meet ahead of COP29 climate summit
- Fans immerse themselves in Marina Abramovic's first China exhibition
- Israel says conducting review after UN peacekeepers wounded in Lebanon
- 'Party atmosphere': Skygazers treated to another aurora show
- Djokovic 'overwhelmed' after 'greatest rival' Nadal's retirement
- Zelensky in Berlin says hopes war with Russia will end next year
- Kyrgyzstan opens rare probe into glacier destruction
Stocks drop on sticky US inflation
Stocks in the United States and Europe slumped on Tuesday while the dollar climbed as data showed that US inflation slowed less than expected in January, diminishing chances of an early interest rate cut.
The closely watched Consumer Price Index (CPI) rose 3.1 percent from a year ago in January, down from 3.4 percent in December, the Department of Labor said, while analysts had tipped it could fall below 3.0 percent.
Meanwhile, the "core" CPI reading that excludes volatile food and energy prices and is more important to policymakers, was steady at a 3.9 percent annual increase.
The US Federal Reserve has indicated it will likely begin to cut interest rates -- which it began to hike in 2022 to tame surging inflation -- later this year as the pace of price rises return closer to its 2.0 percent target. That has heightened the attention of investors to US inflation data.
"The January inflation report came in hot across the board and that has the potential to spook investors after a big rally over the last few months," said eToro analyst Bret Kenwell.
Stocks have been propelled to new heights in recent months as investors anticipate a drop in interest rates which will boost the fortunes of companies, as well as the blockbuster performance of the US tech industry thanks to the boom in artificial intelligence.
Wall Street stocks fell sharply at the start of trading on Tuesday.
The Dow fell 0.8 percent from a record high. The S&P 500 and the Nasdaq Composite, which both set intraday highs on Monday, fell by 1.3 and 2.1 percent respectively.
In Europe, losses deepened after the US data was released.
Traders had been hoping that Tuesday's CPI reading in the world's biggest economy would give the Federal Reserve room to lower interest rates.
Last month, Fed chief Jerome Powell indicated a continuation in the trend of falling inflation was sufficient for the US central bank to begin cutting interest rates later this year, but downplayed the likelihood of a March cut that the market had been hoping for.
"This report likely cements the stance that the Fed will not cut rates in March, likely delaying that decision until May or June," said eToro's Kenwell.
"Of course, if inflation begins to drift higher, those rate-cut bets will be further delayed," he added.
Patrick O'Hare at Briefing.com said that "the hotter-than-expected CPI may give investors an excuse to take profits in a market that many feel is overbought on a short-term basis."
In Asia, most of the region returned to work after a long weekend. Tokyo led advances thanks to a surge in shares of Japanese investment group SoftBank, which was boosted by another blockbuster day for its US-listed chip designer Arm.
Arm has almost doubled in value in the past week -- and trebled since its September listing -- owing to healthy demand for semiconductors fuelled by an expected boom in artificial intelligence.
Bitcoin topped $50,000 Monday for the first time since late 2021 as investors grew optimistic that US approval of broader trading in the unit will ramp up demand.
The cryptocurrency has enjoyed a strong run in recent months, fuelled by expectations US lawmakers would allow the creation of exchange-traded funds (ETFs) that track the price and let the public invest in crypto without directly purchasing it.
After initially dropping in reaction to last month's green light by Washington, bitcoin has rallied about 25 percent since January 22.
- Key figures around 1330 GMT -
New York - Dow: DOWN 0.8 percent at 38,493.33 points
New York - S&P 500: DOWN 1.3 percent at 4,954.72
New York - Nasdaq Composite: DOWN 2.1 percent at 15,600.64
London - FTSE 100: DOWN 0.7 percent at 7,522.78
Paris - CAC 40: DOWN 0.9 percent at 7,617.31
Frankfurt - DAX: DOWN 1.1 percent at 16,855.93
EURO STOXX 50: DOWN 1.4 percent at 4,678.31
Tokyo - Nikkei 225: UP 2.9 percent at 37,963.97 (close)
Hong Kong - Hang Seng Index: Closed for holiday
Shanghai - Composite: Closed for holiday
Euro/dollar: DOWN at $1.0720 from $1.0776 on Monday
Dollar/yen: UP at 150.37 yen from 149.33 yen
Pound/dollar: DOWN at $1.2602 from $1.2630
Euro/pound: DOWN at 85.04 pence from 85.29 pence
Brent North Sea Crude: UP 1. percent at $82. per barrel
West Texas Intermediate: UP 1. percent at $77. per barrel
burs-rl/db
O.Norris--AMWN