Global stocks drop, dollar jumps

MSCI's gauge of stocks across the globe dropped 3.49 points, or 0.41%, to 851.36 and was on track for a third consecutive daily decline after five straight sessions of gains

A gauge of global stocks dropped for a third consecutive session on Thursday while the dollar jumped, after U.S. labour market data and comments from Fed Chair Jerome Powell suggested a slower path of rate cuts from the central bank.

The Labor Department said initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 217,000 for the week.

In the latest inflation figure, the PPI for final demand gained 0.2% last month, matching expectations, after an upwardly revised 0.1% gain in September.

The data comes after Wednesday's CPI rose as expected in October amid higher costs for shelter such as rents.

In the 12 months through October, the PPI rose 2.4% after gaining 1.9% in September.

Powell said ongoing economic growth, a solid job market, and inflation that remains above the 2% target means the U.S. central bank does not need to rush to reduce interest rates and can deliberate carefully.

There was some concern after the election that Trump's threatened tariff policies would cause inflation and that spiked rates a little bit, but typically everybody calms down a little bit after a few days and the market gets back to its knitting, so I expect to see some volatility around here, according to Scott Welch, chief investment officer at Certuity.

The pressure on rates going forward from here is up, not down. We may see rates drop a little bit but when you look at the state of the economy, when you look at the anticipated legislative and executive policy plans, they are going to bounce around between 4% and 5%, he said.

Stocks initially rallied in the wake of the U.S. presidential election. Each of the country’s major indexes closed at records on Monday, but have stalled in recent days as bond yields have moved to four-month highs.

U.S. stocks dropped after the data and extended declines after Powell's comments.

The Dow Jones Industrial Average declined 175.86 points, or 0.40%, to 43,782.33, the S&P 500 dropped 29.15 points, or 0.49%, to 5,956.23 and the Nasdaq Composite tumbled 105.02 points, or 0.55%, to 19,125.71.

MSCI's gauge of stocks across the globe dropped 3.49 points, or 0.41%, to 851.36 and was on track for a third consecutive daily decline after five straight sessions of gains.

European shares rebounded from three-month lows, led by energy and tech stocks after a round of largely positive corporate earnings. The STOXX 600 index closed 1.08% higher.

The dollar index gained 0.34% to 106.82, with the euro down 0.29% at $1.0532. The dollar is on pace for its fifth consecutive session of gains.

Against the Japanese yen, the dollar firmed 0.47% to 156.18. Sterling dropped 0.27% to $1.2669.