Volkswacht Bodensee - US stocks fall, oil rallies as inflation stokes market volatility

With stocks under pressure for much of 2022, markets had been looking to the morning's US consumer price report in hopes that easing inflation would lower pressure on the Federal Reserve to hike interest rates.

While annual inflation slowed slightly in April, the month-over-month increase exceeded expectations. Overall, consumer prices are up 8.3 percent over the last 12 months.

"The key takeaway from the report is that it provided some leeway that suggests peak inflation might have been hit, but with the moderation not as significant as had been hoped, it also stirred concerns that inflation might stick at persistently high levels longer than anyone would like, including the Fed," said Briefing.com analyst Patrick O'Hare.

US stocks gyrated after the report, opening lower, then rallying, then turning retreating again, with losses accelerating later in the session.

All three major indices finished firmly in the red, with the Nasdaq slumping 3.2 percent behind big drops in Apple, Facebook-parent Meta and other tech names.

European stocks rallied, with London rising 1.4 percent.

Frankfurt and Paris gained more than two percent although the European Central Bank signaled for the first time that its first hike in interest rates from historic lows may come as soon as July.

Oil prices jumped around five percent amid ongoing worries over Russian energy supplies.

Ukraine said Russia had halted gas supplies through a key transit hub in the east of the country, fueling fears Moscow's invasion could worsen an energy crisis in Europe.

Ukraine pipeline operator GTSOU said in a statement that Russian state energy giant Gazprom had "stopped supplying gas" to the key Sokhranivka transit point

"Oil prices have remained choppy with prices rebounding strongly today from two-week lows as uncertainty remains about the timing of an EU ban on Russian oil imports," said Michael Hewson at CMC Markets.

- Key figures at around 2050 GMT -

New York - Dow: DOWN 1.0 percent at 31,834.11 (close)

New York - S&P 500: DOWN 1.7 percent at 3,935.18 (close)

New York - Nasdaq: DOWN 3.2 percent at 11,364.24 (close)

London - FTSE 100: UP 1.4 percent at 7,347.66 (close)

Frankfurt - DAX: UP 2.2 percent at 13,828.64 (close)

Paris - CAC 40: UP 2.5 percent at 6,269.73 (close)

EURO STOXX 50: UP 2.6 percent at 3,647.87 (close)

Hong Kong - Hang Seng Index: UP 1.0 percent at 19,824.57 (close)

Shanghai - Composite: UP 0.8 percent at 3,058.70 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 26,213.64 (close)

Brent North Sea crude: UP 4.9 percent at $107.51 per barrel

West Texas Intermediate: UP 6.0 percent at $105.71 per barrel

Euro/dollar: DOWN at $1.0515 from $1.0529 at 2100 GMT Tuesday

Pound/dollar: DOWN at $1.2248 from $1.2316

Euro/pound: UP at 85.84 pence from 85.49 pence

Dollar/yen: DOWN at 130.00 yen from 130.45 yen

burs-jmb/hs

A.Gasser--BTB