WALL Street stocks slipped yesterday after last week’s global surge, as the dollar advanced against major rivals.

The dollar crept higher as traders urged caution over expectations that the Federal Reserve would pull back from massive US interest rate hikes, following cooling inflation in the world’s biggest economy.

US stocks slipped yesterday with the Dow closing 0.6% lower, and the Nasdaq shedding 1.1%.

“There is a little bit of questioning as to whether the market overreacted last week,” said Briefing.com analyst Patrick O’Hare.

The “burst of euphoria” is ebbing away, after fresh warnings that the fight against inflation is still a hard slog yet to be won, added Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

While Fed vice-chair Lael Brainard said yesterday that it would likely be “appropriate soon” for the central bank to slow its pace of rate hikes, she added that it still has work to do on raising rates and tamping down prices.

Investors will get a look this week on whether the cooling has spread to consumers, with US retail sales data due out on Wednesday.

Earnings figures from major retailers Walmart and Target are expected to also provide a window into how inflation is impacting consumer spending, a major driver of the US economy.

European stocks finished higher, with data boosting sentiment.

“There was good news from the eurozone as industrial production came in better than expected this morning,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

While the eurozone is widely seen as heading for a recession, data showed a month-on-month gain of 0.9% in September.

The pound briefly fell by more than 1% against the dollar as the Thursday budget presentation by Chancellor of the Exchequer Jeremy Hunt approaches.

“The pound has also come under pressure… with all manner of reports that the Chancellor will impose new taxes on business that will deter future investment in energy security,” CMC Markets analyst Michael Hewson said.

Meanwhile, market sentiment was given a boost by China’s easing of some pandemic restrictions and authorities reportedly unveiling a plan to support its embattled property sector.

China’s real estate industry has come under immense pressure since officials imposed restrictions in 2020 aimed at reeling in debt, with major developers teetering on the brink of collapse.

The latest moves indicate that Beijing could be turning its focus to supporting the economy, a crucial driver of global growth, according to analysts.

Nomura’s Lu Ting warned, however, that the “measures may have little direct impact on stimulating home purchases”.

Hong Kong’s stock exchange ended more than 1% higher yesterday, while oil prices fell.

“Crude oil prices have slipped back, after OPEC cut its oil demand forecast for the rest of this year, and 2023… citing concerns about rising inflation and interest rates,” said Hewson of CMC Markets.

“Increasing Covid cases within China alongside a rebound in the US dollar are also weighing on prices,” he added.

Key figures around 2135 GMT

New York - Dow: DOWN 0.6% at 33,536.70 points (close)

New York - S&P 500: DOWN 0.9% at 3,957.25 (close)

New York - Nasdaq: DOWN 1.1% at 11,196.22 (close)

London - FTSE 100: UP 0.9% at 7,385.17 (close)

Frankfurt - DAX: UP 0.6% at 14,313.30 (close)

Paris - CAC 40: UP 0.2% at 6,609.17 (close)

EURO STOXX 50: UP 0.5% at 3,887.51 (close)

Tokyo - Nikkei 225: DOWN 1.1% at 27,963.47 (close)

Hong Kong - Hang Seng Index: UP 1.7% at 17,619.71 (close)

Shanghai - Composite: DOWN 0.1% at 3,083.40 (close)

Euro/dollar: DOWN at US$1.0331 from US$1.0361 on Friday

Pound/dollar: DOWN at US$1.1751 from US$1.1839 

Dollar/yen: UP at ¥139.90 from ¥138.70

Euro/pound: UP at 87.89 pence from 87.49 pence

West Texas Intermediate: DOWN 3.5% at US$85.87 per barrel

Brent North Sea crude: DOWN 3.0% at US$93.14 per barrel – AFP, November 15, 2022.