US stocks retreat after Fed's inflation indicator revised up

By Ovunc Kutlu

ISTANBUL (AA) - US stocks opened lower Thursday, giving up some of the gains in the previous day's rally, as the Federal Reserve's preferred inflation indicator was higher than expectations.

The blue-chip Dow Jones industrial average fell 330 points, or 1%, to 33,046 at 9.50 a.m. EDT. The S&P 500 lost 50 points, or 1.3%, to 3,828.

The tech-heavy Nasdaq fell 196 points, or 1.8%, to 10,514.

The indices rallied Thursday to gain between 1.5% - 1.6%.

The Fed's most reliable inflation indicator, 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 aggressively rate hikes next year to fight inflation.

The VIX volatility index, also known as the fear index, jumped 4.1% to 20.90. The 10-year US Treasury yield fell 0.3% to 3.673%.

The dollar index rose 0.3% to 104.48, while the euro was flat at $1.06 against the greenback.

Precious metals were in negative territory. Gold fell 0.7% to $1,800 per ounce and silver dove 1.6% to $23.60.

Crude oil prices increased more than 0.8%. Global benchmark Brent crude was up 0.9% to $82.93 per barrel. US benchmark West Texas Intermediate crude was around $79.06 -- up 1%.