- Biden official says port strike deal not as far as parties think
- Mexico's new president offers apology for 1968 student massacre
- Historic funding round values OpenAI at $157 billion
- Mixed US car sales in Q3 as industry hopes for post-election bounce
- Thunderstorms are a 'boiling pot' of gamma rays, scientists find
- Scientists unlock secret of 'Girl With Pearl Earring'
- Dolphins flash friendly grins when they're ready to play
- Facing backlash, EU moves to delay deforestation rules
- US private sector adds more jobs than expected in September: ADP
- Boys out of critical condition after Zurich stabbings
- Spain logs record summer tourism as inflow draws protests
- Hedi Slimane quits as Celine's artistic director
- Oil prices extend rally on Iran attack
- Spain welcomed record number of tourists this summer
- France says coming tax hikes on the wealthy to be 'temporary'
- Why are Thailand's roads so deadly?
- Oracle to invest $6.5 bn in Malaysian cloud services region
- Parkrun marks 20 years of a free weekly jog, run... or walk
- Oil extends rally after Iran attack, Hong Kong soars again
- Prostitutes, prospectors drive spread in DR Congo mpox capital
- Oil extends rally after Iran attack, Hong Kong resumes surge
- Extreme heat another form of death sentence in Texas jails
- Can music help plants grow? Study suggests sound boosts fungus
- Nike earnings drop, says turnaround will take time
- US dockworkers launch mass strike a month before election
- Iron Dome: Israel's key anti-missile shield
- Cranes stand still as US dockworkers fight for 'future'
- GM reports US sales dip, but says EVs grew
- Sheinbaum takes office as Mexico's first woman president
- Webb telescope detects carbon dioxide on Pluto's largest moon
- Stock markets slump, oil jumps on Middle East concerns
- French PM vows more taxes and spending cuts ahead of budget fight
- Germany inaugurates IBM's first European quantum data centre
- Stock markets diverge as eurozone inflation drops further
- France's richest man takes control of Paris Match magazine
- Anger meets tear gas as Nigeria hardship protests fizzle out
- US dockworkers launch mass strike month before election
- Evacuations from Lebanon: what we know
- Feathers fly at Chanel's Paris fashion return
- UAE oil giant ADNOC swoops on German chemicals firm Covestro
- Eurozone inflation falls under 2% for first time since 2021
- Coldplay ticket scalping fiasco sparks backlash in India
- Droughts drive Spanish boom in pistachio farming
- Tokyo recovers some losses to lead Asian markets higher
- Rural schools empty in North Macedonia due to exodus
- US dockworkers launch strike after labor contract expires
- Thousands evacuated as Super Typhoon Krathon approaches Taiwan
- Kenya airport whistleblower fears for his life
- Sheinbaum to take office as Mexico's first woman president
- Scientists fear underfunded Argentina research on verge of collapse
RBGPF | -2.18% | 59.5 | $ | |
RYCEF | -0.43% | 6.9 | $ | |
CMSC | 0.04% | 24.78 | $ | |
GSK | -2.15% | 39.45 | $ | |
VOD | -2.16% | 9.74 | $ | |
NGG | -1.85% | 68.78 | $ | |
RIO | -0.48% | 70.82 | $ | |
RELX | -0.11% | 47.29 | $ | |
AZN | 1.14% | 79.58 | $ | |
BTI | -1.33% | 35.97 | $ | |
SCS | -2.56% | 12.87 | $ | |
CMSD | -0.04% | 24.93 | $ | |
BCC | -1.33% | 139.53 | $ | |
JRI | -1.12% | 13.38 | $ | |
BP | 0.86% | 32.37 | $ | |
BCE | -1.13% | 34.44 | $ |
Stocks slide as US inflation soars
Stock markets plunged deeper into the red on Friday after data showed that US inflation soared to highest level in 40 years in May, much higher than analysts had expected.
In Europe, all of the major stock indices were down by more than two percent by mid-afternoon.
Paris's blue-chip CAC 40 was showing a loss of 2.3 percent, Frankfurt's DAX index was down 2.3 percent, Milan's FTSE MIB shed 4.6 percent, Madrid's IBEX tumbled 3.5 percent and London's FTSE dropped by 2.0 percent.
On Wall Street, stocks also dropped sharply at the open.
According to US government data, the consumer price index jumped by 8.6 percent on a 12-month basis in May, the steepest increase since December 1981, driven by surging energy and food prices.
"US CPI for May has come in stronger than expected," said Stephen Innes of SPI Asset Management. "Inflation is back on the highs; critically, it's across the board."
The numbers had been eagerly anticipated as investors hungrily look for clues as to the direction of US interest rates at next week's meeting of the Federal Reserve.
A half-point increase in US borrowing costs "was a done deal in any case, so these data aren't an immediate policy influence," said Innes.
But it also cemented expectations for another half-point increase in September, the expert said.
The dollar surged against the pound and other leading currencies as investors bet on an increase in US interest rates next week.
Inflation is soaring across the world, prompting the European Central Bank to finally join the Fed in tightening its monetary policy as it announced on Thursday that it would raise rates next month.
Economists warn that surging inflation, driven by rocketing energy prices, could push top economies into recession.
Adding to the unease was news that officials in China had once again locked down millions of people for Covid testing owing to another flare-up in cases, dealing a blow to hopes for an economic reopening.
"Warning signs about the economy are emerging as weekly (US) jobless claims are starting to rise, China's Covid situation will prove troublesome for supply chains over the next couple of quarters, and as inflationary pressures broaden and show no sign of easing," said Edward Moya, analyst at OANDA trading group.
"It seems reductions in global growth forecasts will become a steady theme over the next few months and that should complicate how much more tightening we see from central banks," he said.
The World Bank and OECD both lowered the global economic growth forecasts for this year earlier this week.
One bright note Friday was data showing that China's producer price inflation eased last month to its lowest level in more than a year.
- Key figures at around 1345 GMT -
New York - Dow: DOWN 1.7 percent at 31,738.00 points
London - FTSE 100: DOWN 2.0 percent at 7,325.37
Frankfurt - DAX: DOWN 2.3 percent at 13,867.36
Paris - CAC 40: DOWN 2.3 percent at 6,210.04
EURO STOXX 50: DOWN 2.6 percent at 3,626.93
Tokyo - Nikkei 225: DOWN 1.5 percent at 27,824.29 (close)
Hong Kong - Hang Seng Index: DOWN 0.3 percent at 21,806.18 (close)
Shanghai - Composite: UP 1.4 percent at 3,284.83 (close)
Euro/dollar: DOWN at $1.0532 from $1.0620 late Thursday
Euro/pound: UP at 85.11 pence from 84.98 pence
Dollar/yen: DOWN at 134.18 yen from 134.40 yen
Pound/dollar: DOWN at $1.2375 from $1.2495
Brent North Sea crude: DOWN 0.8 percent at $122.05 per barrel
West Texas Intermediate: DOWN 0.7 percent at $120.62 per barrel
burs/spm/lth
S.F.Lacroix--CPN