Dollar, US stocks fall on inflation concerns

A broker looks at a chart on his computer screen on ICAP’s trading floor in London, UK, Jan. 3, 2018. REUTERS/Simon Dawson

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  • Global stock decline, biggest monthly drop since March 2020
  • US stocks weighed down by inflation, Amazon profit
  • Dollar softens, but heading for biggest monthly gain since 2015
  • Oil futures rise amid supply concerns

NEW YORK April 29 (Reuters) – The US dollar index fell from a 20-year high, while Wall Street stocks were lower Friday, with the latest economic data spotlighting Amazon.com’s disappointing quarterly report and outlook rising inflation. kept.

In US Treasuries, 10-year benchmark yields capped their biggest monthly gain since December 2009 by rising near their year-long highs following economic data.

Stocks also came under pressure after data showed monthly inflation rose the most since 2005, while US consumer spending rose more than expected in March on the back of strong demand for services. Also, in the first quarter, US labor costs rose the most in 21 years, pointing to rising wage inflation, supporting the Federal Reserve’s policy tightening. read more

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“Core inflation was well under control, but that is of little help to those whose real disposable incomes are falling. The employment cost index rose more than expected and when you combine that with the negative GDP print, unit labor costs will be higher for the first quarter as productivity declines,” said Brian Jacobsen, senior investment strategist for multi-asset solutions at Allspring Global Investments.

The Dow Jones Industrial Average (.DJI) fell 389.58 points, or 1.15%, to 33,526.81, the S&P 500 (.SPX) lost 72.51 points, or 1.69%, to 4,214.99 and the Nasdaq Composite (.IXIC) fell 221.95 points, or 1.72% to 12,649.58.

The pan-European STOXX 600 index (.STOXX) rose 0.73% and the MSCI index of stocks around the world (.MIWD00000PUS) lost 0.52%.

On the last trading day of April, the world stock index was on track for its biggest monthly decline since March 2020.

Shares of Amazon (AMZN.O) fell more than 12% after the e-commerce giant delivered a disappointing quarter and outlook late Thursday as it was engulfed by increased costs to run its warehouses and deliver packages to customers. Read more .

However, emerging market equities (.MSCIEF) were up 2.38% as MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) closed 2.35% higher, while Japan’s Nikkei (.N225) closed 1.75 % increased.

The Russian ruble hit a two-year high against the dollar and euro on Friday as capital controls helped it weather another larger-than-expected rate cut and Russia appeared to be making a last-ditch effort to avoid a default. read more

Other emerging market currencies also recovered on the back of the dollar’s decline.

While the dollar fell from a 20-year high, looking to make 6-day progress against a basket of currencies on Friday, it was still on track for its biggest monthly gain in seven years as concerns about the global economy and an aggressive Federal Reserve strengthened demand for the dollar in April. L2N2WR1KY

The dollar index fell 0.492% and the euro 0.48% to $1.0544. The Japanese yen rose 0.90% against the dollar at 129.70 per dollar.

“The broad story is clear that we’ve seen broad dollar strength,” said Vassili Serebriakov, an FX strategist at UBS in New York.

The US 10-year yield, which had risen to 2.981% on April 20, the highest level since December 2018, was on track to record gains for five consecutive months.

Benchmark 10-year bonds last fell 7/32 in price to yield 2.8889%, from 2.863% late Thursday.

Oil prices rose for a fourth day on Friday as fears of a disruption to Russia’s supply outweighed the impact of the COVID-19 lockdowns in China, the world’s largest crude oil importer.

US crude was recently up 2.03% to $107.50 a barrel and Brent stood at $110.30, up 2.52% on the day.

In Asia, markets had reacted positively after a top decision-making body in China’s ruling Communist Party said it would take steps to support its economy, including controversial internet platforms, as risks mount from the COVID-19 outbreak and the war between Russia and Ukraine. Read more .

Chinese blue chips (.CSI300) and Shanghai stocks (.SSEC) closed 2.4% higher. However, they lost 4.9% and 6.3% respectively for the month.

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Reporting by Sinéad Carew, Chuck Mikolajczak, Karen Brettell in New York, Sujata Rao and Marc Jones in London; Alun John in Hong Kong; adaptation by Kim Coghill, Chizu Nomiyama and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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