World Stocks Sink As Inflation And Economic Concerns Persist

On Thursday, global equities reached their lowest level in 18 months, as investors fretted that persistently strong inflation would force central banks to continue tightening monetary policy.

In the United States, stocks closed a volatile session marginally lower as investors weighed fears of persistent inflation against indications that it may have peaked. Since falling from its all-time high in January, the S&P 500 came within striking distance of officially entering a bear market.

German warnings that Russia was employing energy supply as a "weapon" heightened economic concerns in Europe.

The Europe-wide STOXX 600 index decreased by 0.75 percent. The MSCI index of global stocks was down 0.69 percent as of 5:09 p.m. ET (2109 GMT).

This leading global index is down over 20% for the year.

The Dow Jones Industrial Average dropped 103.81 points, or 0.33 percent, to 31,730.3, while the S&P 500 lost 5.1 points, or 0.13 percent, to 3,930.08. Meanwhile, the Nasdaq Composite gained 6.73 points, or 0.06 percent, to 11,370.96. [.N]

As global economic concerns increased, the dollar's appeal as a safe-haven currency increased.

The dollar index increased by 0.711% after reaching 104.92, its highest level since December 12, 2002. The euro fell 0.02 percent to $1.0377 after reaching its lowest level since January 3, 2017 at $1.0352.

On account of supply concerns stemming from the impending ban on Russian oil by the European Union, oil prices stabilized around the middle of the pack. Brent crude lost 6 cents to close at $107.45 a barrel. WTI crude increased 42 cents, or 0.4%, to $106.13 a barrel.

The U.S. Labor Department said that the producer price index for final demand increased by 0.5% in April, compared to a 1.6% increase in March, as the cost of energy products decreased.

In April, the year-over-year increase in consumer prices slowed to 8.3% from 8.5% in March, but beat the 8.1% that economists had predicted.

ANZ bank analysts noted, "It has been a difficult time for financial assets since the Fed raised rates... and the ensuing robust US labor market and CPI statistics have heightened concerns about the magnitude of the Fed's challenge."

Since records began, this is the worst start to a year for global stocks. 

Overnight, the primary pan-Asia-Pacific indexes fell 2.5% to a 22-month low. Japan's Nikkei dipped 1.8. Emerging market equities fell 2.28 percent .

Treasury yields declined. After the benchmark U.S. government bond fell to a morning low of 2.816 percent, the yield on 10-year Treasury notes US10YT=RR decreased 7.1 basis points to 2.843 percent.

The benchmark 10-year yield for Europe, Germany, plummeted as much as 15 basis points to 0.85%, its lowest level in over two weeks.

With the collapse of the so-called stablecoin TerraUSD and selling in bitcoin and a 15 percent decline in the second-largest cryptocurrency, ether, the cryptocurrency market decline continues.

Tether, the largest stablecoin by market capitalization with a value directly pegged to the dollar, fell below its so-called "peg" to the dollar. The global sell-off has now erased over $1 trillion from cryptocurrency markets. Approximately 35 percent of this loss has occurred this week.

"The collapse of TerraUSD's peg has had certain undesirable and anticipated repercussions. We have witnessed widespread liquidation in BTC, ETH, and the majority of altcoins "Richard Usher, the head of OTC trading at BCB Group, commented on other cryptocurrencies.

Precious metals fell as well. The spot price of gold decreased 1.7% to $1,821.52 per ounce. Futures for gold in the U.S. declined 1.64 percent to $1,823.80 per ounce. [MET/L]

In official trading, the price of copper on the London Metal Exchange (LME) was down 3.6% to $9,000 per ton after sliding as low as $8,938 per ton. In March, prices reached a record high of $10,845 before falling by 17%.