Global stocks had a mixed showing Friday, with hotter-than-expected US wholesale prices renewing concerns that the Federal Reserve will push on with aggressive policies against inflation.
Investors have been poring over economic data as they try to anticipate if the US central bank will shift to a softer approach to interest rate hikes at a regular meeting next week.
While inflation has shown signs of easing, government data released Friday showed that producer prices still remained elevated, sending key US indices into the red.
Meanwhile, markets welcomed China’s easing of its zero-Covid restrictions, which have hammered the world’s second biggest economy.
China’s consumer inflation slowed further in November as well, falling below two percent and giving authorities room to unveil fresh stimulus measures.
Hong Kong shares closed sharply higher Friday, building on big gains for the week while Chinese mainland markets were also higher.
European markets also ended the day higher.
Wall Street stocks finished lower, with the S&P 500 and Nasdaq Composite Index both shedding 0.7 percent, while the Dow Jones Industrial Average fell 0.9 percent.
This came after the producer price index — a gauge of inflation — rose by 0.3 percent in November, more than analysts expected.
“Wall Street had a somewhat mixed day of economic data,” said Edward Moya of the OANDA trading platform.
“A hot PPI report was then countered by a University of Michigan report that showed inflation expectations are coming down quickly,” he added in a note.
For now, markets are keeping a close eye on consumer price data due next week, which in turn could have a bearing on the Fed’s monetary policy path.
The Fed has raised rates by 0.75 percentage points in each of its last four meetings, but is widely expected to slow the pace after central bankers gather next week.
However, investors are concerned that a strong jobs market and other data might convince the Fed to tighten monetary policy longer than hoped.
The European Central Bank and the Bank of England also have rate decisions due next week after hiking their rates sharply this year.
“The hotter-than-expected PPI print called into question the ‘peak inflation’ narrative, although traders know that it is too late for the Fed to change its mind about a 50 (basis points) hike next week,” said Fawad Razaqzada, market analyst at Forex.com and City Index.
Elsewhere, oil prices jumped by more than one percent as Russian President Vladimir Putin threatened to cut production after Western nations imposed a $60 price cap on Russian crude.
“Today’s modest rebound however doesn’t change the fact that oil prices are now well below the levels they were at the time of the Russian invasion of Ukraine,” noted market analyst Michael Hewson at CMC Markets.
Key figures around 2130 GMT
New York – Dow: DOWN 0.9 percent at 33,476.46 (close)
New York – S&P 500: DOWN 0.7 percent at 3,934.38 (close)
New York – Nasdaq: DOWN 0.7 percent at 11,004.61 (close)
EURO STOXX 50: UP 0.5 percent at 3,942.62 (close)
London – FTSE 100: UP less than 0.1 percent at 7,476.63 (close)
Frankfurt – DAX: UP 0.7 percent at 14,370.72 (close)
Paris – CAC 40: UP 0.5 percent at 6,677.64 (close)
Tokyo – Nikkei 225: UP 1.2 percent at 27,901.01 (close)
Hong Kong – Hang Seng Index: UP 2.3 percent at 19,900.87 (close)
Shanghai – Composite: UP 0.3 percent at 3,206.95 (close)
Euro/dollar: DOWN at $1.0534 from $1.0560 on Thursday
Dollar/yen: DOWN at 136.57 yen from 136.61 yen
Pound/dollar: UP at $1.2262 from $1.2239
Euro/pound: DOWN at 85.90 pence from 86.24 pence
Brent North Sea crude: DOWN 0.1 percent at $76.10 per barrel
West Texas Intermediate: DOWN 0.6 percent at $71.02 per barrel
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