US economic reports drag Wall Street lower as Europe and Asia stock markets gain

Data on consumer prices report and retail sales further fuelled uncertainty in the world's biggest economy

US retail sales were flat in September, official data showed on Friday, as auto sales slowed and higher prices weighed on consumption. AFP

US stock markets ended the week down on Friday, continued to be spooked by stubbornly high inflation and recession worries, while Europe gained amid political drama in the UK and Asia snapped a five-day losing streak.

Wall Street pared gains from earlier in the week, rattled by Thursday's consumer prices report and Friday's retail sales data, further fuelling uncertainty in the world's biggest economy.

US consumer prices soared 8.2 per cent annually, all but ensuring that the Federal Reserve will announce another super-sized interest rate hike at its next meeting, while retail sales were virtually unchanged at $684 billion from August, showing the inflation's ill effects on consumers.

At the close in New York, the S&P 500 lost 2.4 per cent, while the Dow declined 1.3 per cent.

"There is no doubt that higher interest rates and soaring inflation have pushed consumers into the corner, and this leaves a small window open for any optimism around the US retail numbers," said Naeem Aslam, chief market analyst at Avatrade.

"However, if the data shows that consumers are bold and they are investing, we are highly likely to see a strong rally for the US market."

The tech-heavy Nasdaq Composite plunged 3.1 per cent, dragged by Tesla as its shares halved from their all-time high amid a broader market selloff that has weighed on technology companies.

Shares of the world's biggest electric vehicle manufacturer settled down 7.6 per cent to $204.99 on Friday from its record $409.97 closing price on November 4, 2021, tanking its market capitalisation to about $642 billion.

In Europe, London's FTSE 100 was able to eke out a 0.1 per cent gain at the close, amid drama on Downing Street and a weaker pound.

New British Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng as pressure mounted on the government in the aftermath of a controversial mini budget that involved big spending and tax cuts.

The budget plan, revealed on September 23, sent the currency spiralling to a record low against the dollar, near parity with it. It dived even further after Ms Truss appointed Jeremy Hunt to replace Mr Kwarteng and announced a policy U-turn.

UK politics were a "soap opera" that dominated forex markets, said Stephen Innes, managing partner at SPI Asset Management.

Elsewhere in Europe, Frankfurt's DAX added 0.7 per cent and Paris' CAC 40 rose 0.9 per cent.

Earlier in Asia, Tokyo's Nikkei 225 jumped at the close to 3.3 per cent, Hong Kong's Hang Seng Index added 1.2 per cent and the Shanghai Composite jumped 1.8 per cent. South Korea's Kospi rose 2.3 per cent, while Australia's S&P/ASX 200 gained 1.7 per cent.

In oil markets, prices gave up early gains and settled lower on Friday, after demand worries and fears of a potential global recession soured outlook.

Brent slipped 3.11 per cent to settle at $91.63 a barrel, while West Texas Intermediate closed down 3.93 per cent to $85.61 a barrel.

Gold prices, meanwhile, slid 1.4 per cent to its biggest weakly drop in two months as a stronger dollar weighed on the market. Gold for December delivery declined $28.10 to $1,648.90 an ounce.