By YEET MAGAZINE | Updated on September 10, 2021 at 7:32 am

By YEET MAGAZINE Updated 0118 GMT (0918 HKT) October 2, 2021

NEW YORK (Reuters) - Global stock markets continued to fall Thursday as inflation fears persisted and expectations grew that the U.S. Federal Reserve will tighten policy in the coming months.

Earlier in the week, global stock markets suffered their worst rout since January. A heavy sell-off in tech stocks on Tuesday had consigned Wall Street to its steepest drop since mid-July.

Global shares had staged a partial recovery Wednesday but resumed their decline on Thursday.

MSCI's gauge of stocks across the globe shed 0.04%.

The Nasdaq Composite index of tech stocks rallied but the Dow Jones Industrial Average and S&P 500 were in negative territory.

The Dow Jones Industrial Average fell 253.86 points, or 0.74%, to 34,136.86, the S&P 500 lost 10.64 points, or 0.24%, to 4,348.82 and the Nasdaq Composite added 61.07 points, or 0.42%, to 14,573.51.

"U.S. investors are glad to see September end," said Edward Moya, senior market analyst at OANDA, summing up the mood of most market participants. "US stocks ended mostly on a down note as lawmakers try to avoid a government shutdown and deliver on the $1 trillion infrastructure bill, all while an energy crisis brews abroad."

Federal Reserve Chair Jerome Powell said on Wednesday that resolving "tension" between high inflation and still-elevated unemployment is the most urgent issue facing the Fed right now, acknowledging the U.S. central bank's two goals of stable prices and full employment are in potential conflict.

The prospect of inflation has helped the greenback to end the quarter on a positive note but it slipped from a one-year high on Thursday following dismal U.S. weekly jobs numbers..

The dollar index fell 0.091%, with the euro down 0.16% to $1.1577.

Gold, an alternative safe-haven, rose more than 2% as the dollar declined.

U.S. gold futures settled up 2% at $1,757.

Spot gold added 1.7% to $1,755.81 an ounce.

U.S. Treasury yields dipped, having risen sharply earlier in the week, as investors watched budget talks in Washington and rebalanced portfolios with the end of September.

Benchmark 10-year notes last rose 4/32 in price to yield 1.5271%, from 1.539% late on Wednesday.

Electricity prices in France are expected to rise around 12% by February, French environment minister Barbara Pompili said on Thursday, highlighting inflationary pressures sweeping across Europe.

French inflation hit a near 10-year high of 2.7% in September, official numbers showed, coming in slightly less than forecast. Italy's annual inflation rate rose to 3.0%.

"This is not a broad-based inflationary spiral," Oxford Economics analysts wrote in a note, though they added there was "little relief in sight for the record high energy prices in the coming months, with the severity of this winter a key factor".

Germany's 10-year government bond yield was little changed at -0.208%.

European stocks ended flat.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.24% after several days of losses, but was still set for a 4.5% monthly decline and a 9.3% loss on the quarter.

That would be the benchmark's worst quarter since the first three months of 2020, as COVID-19 raged across Southeast Asia and investors worried about slowing global growth with China a particular concern.

China's economy has been hit by regulatory curbs in the tech and property sectors and is now grappling with a power shortage.

Data published on Thursday showed China's factory activity unexpectedly shrank in September, but services returned to expansion as COVID-19 outbreaks receded.

© Reuters. FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

However, analysts say slowing growth would pressure authorities to ease policy. That provided battered Chinese markets with some respite, with blue chips rising 0.67%.

U.S. crude oil futures settled at $75.03 per barrel, up 0.3%. Brent crude futures settled at $78.52 per barrel, down 0.2%.