US stocks close lower as inflation may trigger more aggressive Fed rate hikes

By Ovunc Kutlu

ANKARA (AA) - US stocks closed with losses Wednesday as higher consumer inflation may trigger steeper rate hikes by the Federal Reserve.

Annual consumer inflation rose 9.1% in June, higher than the market expectation of 8.8%, after rising 8.6% in May, according to the Labor Department.

Higher inflation could trigger more aggressive policy rates by the Federal Reserve, as the central bank can now make an interest rate hike of 100 basis points at the conclusion of its two-day meeting July 27.

The blue-chip Dow was down 208 points, or 0.67% to close at 30,772. The S&P 500 fell 17 points, or 0.45%, to close at 3,801.

The tech-heavy Nasdaq was off 17 points, or 0.15%, to end the day at 11,247.

Despite the gloomy outlook, the VIX volatility index, also known as the fear index, fell 1.7% to 26.82. The 10-year US Treasury yield decreased 1.4% to 2.915%.

The dollar index was almost flat at 108.02, hovering near its 20-year record high. The euro, on the other hand, rose to $1.0055 after falling to a two-decade low of $0.099 against the dollar.

Precious metals changed course with gold rising 0.4% to $1,733 and silver increasing 1.4% to $19.2.

Global oil benchmark Brent crude was flat at $99.50 per barrel, while US benchmark West Texas Intermediate (WTI) was at $96.14 -- up 0.3%.