As stocks rallied due to growth concerns, the US dollar rose

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NEW YORK – Global stocks sank in four sessions on Wednesday on concerns about rising inflation over economic growth, and the dollar strengthened for the first time.

The mood was underscored by a 9% rise in British consumer prices and a faster-than-expected acceleration in inflation in Canada.

British inflation rose to its highest annual rate since 1982 as energy bills rose, while Canadian inflation rose 6.8% last month, largely driven by rising food and shelter prices, statistics show.

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British inflation is now the highest in Europe’s major economies, but global prices are rising sharply, forcing central banks to raise interest rates and slowing growth following a slight fall in US home building in April.

Rising prices and material shortages have already hit home building, with the economy sector the most sensitive to rates. But a report from the U.S. Department of Commerce also showed a record backlog of home construction, indicating that the decline in home construction may be marginal.

Adding to the frustration with inflation is the result of revenue from Target Corporation, whose quarterly profit has halved as it warned of a large margin injury this year due to rising fuel and freight costs.

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Target shares fell 24.88%, its biggest one-day decline since the “Black Monday” stock market crash on October 19, 1987, a day after Walmart Inc. warned of a similar margin squeeze and its stock fell 11.4% on October 16, 1987. The percentage of days has decreased since.

“It was Walmart yesterday and everyone thought it was a unit,” said Dennis Dick, head of market structure and proprietary trader at Bright Trading LLC in Las Vegas. “Now that the target has not been able to earn much more than Walmart, they are afraid that the consumer is not as strong as everyone thinks.”

Globally, MSCI’s stock measure fell 2.74%, while in Europe, the pan-regional STOXX 600 index fell 1.14%.

On Wall Street, the Dow Jones Industrial Average lost 3.56%, the S&P 500 lost 4.03% and the Nasdaq Composite lost 4.73%.

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The fall of the S&P 500 and Dow marks their biggest one-day fall since June 11, 2020.

While some analysts are willing to predict the end of the first five months of the year for risky assets in the amount of macroeconomic uncertainty, much-anticipated market volatility will be ideal for some time to come.

The US dollar rose as risky asset sales boosted Greenback’s appeal for safe haven, which was about to snap a three-session losing streak.

The dollar index rose 0.581%, while the euro fell 0.8% to 0 1.0463. The Japanese yen strengthened by 0.92% to 128.23 against the dollar.

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Treasury yields have declined, although a steep path to rates remains in the conventional market consensus as benchmark 10-year note yields hit a one-week high of 3.015% following Powell’s scathing remarks.

Yields fell 8.1 basis points to 2.890% on Wednesday after a soft US housing start.

German two-year government bond yields reached 0.444%, the highest since the reckoning of the more reckless central banker since November 2011, and last rose 1.6 basis points to 0.386%. The European Central Bank’s Class Knott said on Tuesday that a 50-basis-point rate hike was possible in July if inflation continued to expand.

Gold prices fluctuated slightly despite the risk-free environment due to rising US interest rates and a weakening of the resurgent dollar metal.

Spot gold was up 0.1% at 8 1,816.06 an ounce.

Traders were less worried about the supply crisis after official data showed U.S. refiners had increased output, in contrast to initial gains as oil prices fell in volatile trade.

US crude fell 2.5% to $ 109.59 a barrel and Brent settled at 9 109.11, down 2.52% for the day.

(Reporting by Herbert Lash and Chuck Mykolajak; Additional report by Devik Jain in Bangalore; Editing by Jonathan Otis)