BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening on a subdued note on Thursday as investors ponder the outlook for inflation and interest rates amid escalating West Asia conflict.
After U.S. CPI data surprised to the upside, investors now await the release of U.S. producer price inflation and retail sales data as well as speeches from Fed officials, including Chair Kevin Warsh later in the day for additional clues on the Fed's next move.
San Francisco Fed president Mary Daly signaled Wednesday that the U.S. central bank will likely need to raise short-term interest rates further to address inflation, adding there's no need to do so at the October 27-28 meeting.
Traders now see a nearly 35 percent chance the Fed will raise borrowing costs at its next meeting later this month, up from the 22 percent probability seen a day earlier, according to the CME FedWatch tool.
Asian markets were broadly lower, with South Korea's Kospi plunging nearly 8 percent and Japan's Nikkei tumbling more than 4 percent as tech stocks nosedived on concerns about the sustainability of the artificial-intelligence trade.
Investors are looking to AI chip giant TSMC's third-quarter earnings and forecasts for evidence that AI-driven growth remains intact.
The U.S. dollar slipped from an 18-month high, while gold prices rose about 1 percent to $4,145 an ounce after touching a one-week low in the previous session.
Brent crude futures fell nearly 2 percent toward $104 a barrel due to profit taking following a recent rally as reports suggested the Trump administration is considering easing sanctions on so-called shadow fleet vessels in order to reduce record-high global freight rates.
However, supply concerns remain elevated after two commercial vessels were struck by unidentified projectiles while passing through the Strait of Hormuz on October 13 and 14, as reported by the Maritime and Port Authority of Singapore.
Yemen's Houthis vowed to press on with attacks on airports and oil facilities in Saudi Arabia after hitting the headquarters of the Saudi state-owned oil company Aramco a day earlier.
Elsewhere, Russia accused Ukraine of carrying out drone strikes on two oil refineries, including the 400,000-barrel-per-day Ryazan facility.
'We see no indication that the Ukrainian side is moving towards an energy ceasefire', Russian Deputy Prime Minister Alexander Novak said.
U.S. stocks dropped to their worst day since July overnight, feeling pressure from rising yields in the bond market as a hotter-than-expected inflation reading bolstered the case for another Federal Reserve rate increase this year.
The 10-year Treasury briefly jumped above 5.32 percent before giving back much of the gain as data showed the annual rate of consumer price growth jumped to 3.7 percent in September from 3.4 percent in August, matching expectations.
The annual rate of core consumer price growth accelerated to 2.6 from 2.4 percent in August, coming in slightly above economist estimates for 2.5 percent growth.
The S&P 500 fell 1.1 percent for a fifth loss in the six days after setting a new record high. The tech-heavy Nasdaq Composite tumbled 1.9 percent on AI funding concerns, with Broadcom CEO comparing parts of the AI trade to a casino. The narrower Dow slipped 0.1 percent.
European stocks closed higher on Wednesday as upbeat earnings from ASML boosted technology stocks. The pan-European STOXX 600 rose 0.4 percent.
The German DAX edged up 0.2 percent, France's CAC 40 added 0.6 percent and the U.K.'s FTSE 100 advanced 0.7 percent.
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