- 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
Global 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 Labor Department said-- but analysts had predicted that the rate could fall below 3.0 percent.
Meanwhile, the core CPI reading that excludes volatile food and energy prices -- and which 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 later this year, but Fed officials have continued to fixate on the central bank's two percent inflation target.
US Treasury bond yields jumped as futures markets shifted bets against central bank rate cuts in March and May.
"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.
But Wall Street indices spent the entire day in the red, with investors seemingly using the inflation data as an opportunity to take profits. All three major indices dropped more than one percent.
The inflation report "just stretches out the whole process," said Maris Ogg of Tower Bridge Advisors, who described the CPI reading as a "blip."
"I don't see any reason why the economy wouldn't continue to do reasonably well," Ogg said.
Europe stocks closed down almost one percent.
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 tripled since its September listing -- owing to healthy demand for semiconductors fueled by an expected boom in artificial intelligence.
The dollar also pushed higher against the euro and other currencies following the CPI data.
"For a Fed that's been telling markets that rate cuts are on the way, even during the hiking cycle, this complicates matters as core inflation remains far away from the Fed's two percent target," said a note from James Stanley of Forex.com.
- Key figures around 2130 GMT -
New York - Dow: DOWN 1.4 percent at 38,272.75 (close)
New York - S&P 500: DOWN 1.4 percent at 4,953.17 (close)
New York - Nasdaq Composite: DOWN 1.8 percent at 15,655.60 (close)
London - FTSE 100: DOWN 0.8 percent at 7,512.28 (close)
Paris - CAC 40: DOWN 0.8 percent at 7,625.31 (close)
Frankfurt - DAX: DOWN 0.9 percent at 16,880.83 (close)
EURO STOXX 50: DOWN 1.2 percent at 4,689.28 (close)
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 $1.0712 from $1.0772 on Monday
Dollar/yen: UP at 150.80 yen from 149.35 yen
Pound/dollar: DOWN at $1.2590 from $1.2629
Euro/pound: DOWN at 85.06 pence from 85.29 pence
Brent North Sea Crude: UP 0.9 percent at $82.77 per barrel
West Texas Intermediate: UP 1.2 percent at $77.87 per barrel
burs-jmb/sst
S.Gregor--AMWN