Another surprisingly hot US inflation reading lifted US Treasury yields and gave equities players a good reason to take profits after the market's recent run to new highs, with losses accelerating into the close. The Dow Jones industrial average declined 0.7 percent, the S&P 500 fell 0.8 percent, and NASDAQ lost 1.7 percent.
Growth and momentum stocks fell the most, with the FANMAG complex off, paced by technology and communications stocks including Apple, down 1.9 percent, Facebook, down 2.3 percent, and Google, down 2.0 percent.
Energy stocks also suffered, with oil prices falling back as the dollar rallied and US oil inventories showed an unexpected rise. Consumer discretionary stocks faded as the day progressed. Amazon ended down 2.6 percent after rising earlier with support from the well-received IPO of Rivian, the electric vehicle startup, which soared 29 percent on its first day of trading to exceed the respective valuations of Ford and General Motors. Amazon is a Rivian backer.
Holding up best were consumer staples, utilities, and health care, with health care getting a lift from biotech and big pharma, including Pfizer, up 3.6 percent, and Merck, up 1.5 percent.
In US economic news, consumer prices rose past expectations in October, as the CPI was up 0.9 percent on the month, lifting the 12-month rate to 6.2 percent from 5.4 percent in September, the largest increase since November 1990. Econoday's consensus had centered on 0.5 percent and 5.8 percent, respectively.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil dropped US$2.33 to US$82.57 while spot gold rose US$19.42 to US$1,851.81. The US dollar rallied vs. major currencies. Yields on the US Treasury 30-year bond rose 9 basis points to 1.92 percent, and the 10-year note rose 11 basis points to 1.56 percent.
Mostly positive company news lifted equities with energy, utilities, and media stocks leading. The Europe-wide STOXX 600 and German DAX both rose 0.2 percent, the French CAC was unchanged, and the UK FTSE 100 gained 0.9 percent.
Gains were limited by upside surprises on inflation reports from China and the US and weaker Asian markets overnight. On the positive side, natural gas prices continued to fall back in Europe on reports Gazprom was stepping up supplies.
Among sectors, energy stocks advanced with Maersk Drilling, the Danish oil servicer, up 18 percent after agreeing to merge with Noble, its US counterpart. E.ON, the German utility, gained 1.4 percent after an earnings beat. ITV, the UK media stock, rose 15 percent after boosting its revenue forecast. Retailer Marks & Spencer jumped 17 percent and Halfords, the auto parts retailer, rose 21 percent on earnings beats.
Lagging sectors included technology, personal & household goods, travel & leisure, and industrials. Sporting goods giant Adidas fell 3.5 percent and Salvatore Ferragamo, the luxury clothing retailer, fell 4.2 percent on disappointing trading results. Credit Agricole, the French banking giant, slipped 1.8 percent as its trading revenues slipped.
News of higher-than-expected Chinese producer price inflation undercut equities Wednesday as the reports fed worries about inflation and prospects for further economic slowing.
Chinese markets weakened on news that Chinese producer prices surged by 13.5 percent from a year earlier in October, well above expectations. Much of the rise reflected rising fuel and power costs, which have also undercut growth. China's CSI 300 index declined 0.5 percent and the Shanghai composite slipped 0.4 percent. Among sectors, consumer staples and materials underperformed while real estate perked up. Markets were on edge as China Evergrande faced another large debt payment deadline on Wednesday.
Hong Kong's Hang Seng index recovered initial losses to end up 0.7 percent, with health care and property stocks better while consumer goods & service lagged. Separately, Taiwan's Taiex benchmark firmed by 0.1 percent.
Japanese major stock indexes were hurt by US and Chinese market weakness and the yen's strength. The Nikkei 225 declined 0.6 percent and the Topix fell 0.5 percent. Most sectors declined, led by air transportation, metals, and rubber goods makers. Among companies in focus, video game maker Nexon rose 14 percent on an earnings beat and better guidance. On the downside, Kirin, the beer maker, fell 6.2 percent after reporting an earnings miss.
Separately, South Korea's KOSPI dropped 1.1 percent as its tech giants followed the selloff in Tesla and as risk appetite was hurt by Chinese inflation figures.
China's selloff depressed Australian equities with the All Ordinaries index down 0.2 percent. Materials prices lagged as industrial metals slipped on China worries. Coal and liquefied natural gas producers hurt energy shares. On the positive side, utilities got a boost from AGL Energy, up 1.9 percent to recover some recent losses. National Australia Bank gained 4.4 percent on positive analyst comments after its earnings.
In Asia/Pacific, the Japanese producer price figures are scheduled. In Europe, the following UK reports are due: quarterly GDP, monthly GDP, industrial production, and merchandise trade. In North America, bond markets are closed on public holidays, Veterans Day in the US and Remembrance Day in Canada. Stock markets are open.