US stocks plummet as Fed's inflation indicator shows gains

By Ovunc Kutlu

ISTANBUL (AA) - US stocks have been plummeting on Friday as the Federal Reserve's preferred inflation indicator increased in January both annually and monthly, coming higher than the market expectations.

The Dow Jones was down 445 points, or 1.35%, to 32,708 at 10.45 a.m. EDT (1545GMT). The S&P 500 fell 60 points, or 1.5%, to 3,952.

The Nasdaq dove 230 points, or 2%, to 11,359 at the time.

The core personal consumption expenditures price index rose 4.7% annually in January, up from a 4.6% year-on-year gain in December, and coming higher than the market estimate of a 4.3% increase, according to the Commerce Department figures released earlier.

On a monthly basis, the index rose 0.6% in January, up from a 0.4% monthly gain in December, and higher than the market estimate of a 0.4% increase.

The high figures raised fears among investors that the Fed is most likely to continue its interest rate hikes for at least the first half of this year.

The VIX volatility index, also known as the fear index, jumped 7.6% to 22.75. The 10-year US Treasury yield, meanwhile, rose 1.8% to 3.951%.

The dollar index was up 0.56% to 105.18, while the euro trimmed 0.48% to $1.0545 against the greenback.

Precious metals were in negative territory, with gold shedding 0.64% to $1,810 an ounce and silver falling 2.2% to $20.85.

Oil prices were down around 0.5%, with global benchmark Brent crude at $81.88 per barrel and US benchmark West Texas Intermediate at $75.01 a barrel.