US stock markets retreated further on Wednesday as the bogeyman of inflation returned to spook investors, but European equities mostly rose and bitcoin reached a new record -- temporarily.
The three major US indices were in the red, with the broad-based S&P 500 shedding 0.8 percent after official figures showed the US consumer price index rose to a 30-year high in October.
London's FTSE 100 and the DAX in Frankfurt closed higher while the CAC 40 in Paris finished flat.
Gold, silver and Bitcoin all gained initially as investors flooded into assets viewed as a hedge against the corrosive effect of inflation on their savings, but later retreated.
"Investors are seeing bitcoin as a tool for beating inflation. And who can blame them?" said City Index analyst Fiona Cincotta. "As ironic as it seems for such a volatile asset, bitcoin's safe haven status could surge."
Bitcoin touched $68,744 at one point, before dropping to $64,832. Gold reversed course as well, holding flat at $1,848 an ounce, while silver was unchanged at $24.77 an ounce.
In New York, the Dow Jones Industrial Average, S&P 500 and Nasdaq all continued their retreat from the longest run of record-high closes since 1997, according to market data firm Factset.
"We've just had too good a run not to pause and pull back a bit," said Neil Wilson, chief markets analyst at Markets.com.
But fundamentals behind the rally remain strong, he said: solid company earnings and economic growth.
"The big question is whether markets think inflation is going to become worse and more of a headwind to valuations and earnings, or cool off," Wilson said.
- Inflation 'sky high' -
The US CPI spike added to concerns that supply bottlenecks, along with shortages of key components and workers will lead to persistent inflation, despite assurances from Federal Reserve Chair Jerome Powell that the pressures will fade.
Some economists think the central bank will have to be more aggressive to contain prices, pulling back more quickly on its bond buying program and potentially raising the key borrowing rate multiple times next year.
"The higher inflation runs, the more people think Powell is going to accelerate the program. And the closer you are to an interest rate increase," said Maris Ogg of Tower Bridge Advisors.
Also on Wednesday, China released data showing the prices paid at factory gates had jumped 13.5 percent in October from a year earlier to their highest level in more than two decades due to soaring energy costs and as supplies were hit by coronavirus lockdowns in parts of the country.
- Key figures around 1650 GMT -
New York - Dow: DOWN 0.7 percent at 36,079.94 (close)
New York - S&P 500: DOWN 0.8 percent at 4,646.71 (close)
New York - Nasdaq: DOWN 1.7 percent at 15,622.71 (close)
London - FTSE 100: UP 0.9 percent at 7,340.15 (close)
Frankfurt - DAX: UP 0.2 percent at 16,067.83 (close)
Paris - CAC 40: FLAT at 7,045.16 (close)
EURO STOXX 50: UP 0.1 percent at 4,348.82 (close)
Tokyo - Nikkei 225: DOWN 0.6 percent at 29,106.78 (close)
Hong Kong - Hang Seng Index: UP 0.7 percent at 24,996.14 (close)
Shanghai - Composite: DOWN 0.4 percent at 3,492.46 (close)
Euro/dollar: DOWN at $1.1479 from $1.1594 at 2150 GMT
Pound/dollar: DOWN at $1.3405 from $1.3558
Euro/pound: UP at 85.60 pence from 85.49 pence
Dollar/yen: UP at 113.87 yen from 112.87 yen
Brent North Sea crude: DOWN 2.4 percent at $82.72 per barrel
West Texas Intermediate: FLAT at $81.34 per barrel