US stocks nosedive as Fed's inflation indicator rekindles rate hike fears

By Ovunc Kutlu

ISTANBUL (AA) - US stocks nosedived Thursday to end with major losses as the Federal Reserve's preferred inflation indicator came in higher than expectations, rekindling rate hike fears.

The Dow Jones Industrial Average fell 348.99 points, or 1.05%, to finish at 33,027.49. The blue-chip index was down more than 600 points during midday trading.

The S&P 500 lost 56.05 points, or 1.45%, to close at 3,822.39.

The Nasdaq declined 233.25 points, or 2.18%, to 10,476.12. The tech-heavy index was down more than 350 points at one point during trading hours.

Among tech stocks, electric carmaker Tesla was down a massive 8.9%, followed by e-commerce firm Etsy for a 5.2% decline.

The Fed's most reliable inflation indicator, the core personal consumption expenditures (PCE) price index, increased 4.7% annually in the third quarter, the final reading of the Commerce Department said earlier.

While the index came in higher than market expectations of 4.6%, it is an upward revision of 0.1 percentage point from the second reading.

The increase in the figure caused fears to return that the US central bank could continue its aggressive rate hikes next year to fight inflation.

The VIX volatility index, also known as the fear index, jumped 9.5% to 21.97. The 10-year US Treasury yield rose 0.05% to 3.686%.

The dollar index rose 0.25% to 104.42, while the euro was down 0.1% at $1.0593 against the greenback.

Precious metals extended their losses. Gold fell 1.2% to $1,792 per ounce and silver dove 1.7% to $23.56.

Crude oil prices gave up earlier gains and changed course. Global benchmark Brent crude was down 0.6% at $81.73 per barrel. US benchmark West Texas Intermediate crude was around $78.27 -- down 0.03%.