BEIJING (AP) -- Global stocks sank Thursday after the Federal Reserve added to recession fears by suggesting more U.S. rate hikes are likely to cool inflation.
London, Shanghai, Frankfurt and Hong Kong followed Wall Street lower after the Fed on Wednesday raised its key rate to a 15-year high. Oil prices fell by more than $1 per barrel.
The future for Wall Street's benchmark S&P 500 index was up less than 0.1%, suggesting some investors were looking to buy at depressed prices after the benchmark fell 2.5% the previous day.
The Fed on Wednesday raised its short-term lending rate by 0.75 percentage points, three times its usual margin, for a fourth time this year.
Fed Chair Jerome Powell reinforced expectations of more rate hikes by saying "we have a ways to go." He indicated the level that is high enough to bring down inflation looks higher than it did in September but gave no target.
"Recession risks are rising, but that is the price the Fed is prepared to pay to get inflation under control," said James Knightley, Padhraic Garvey and Chris Turner of ING in a report.
In early trading, the FTSE 100 in London lost 0.7% to 7,097.12. The DAX in Frankfurt declined 0.6% to 13,181.97. The CAC 40 in Paris sank 0.8% to 6,228.03.
On Wall Street, the future for the Dow Jones Industrial Average was up less than 0.1%.
On Wednesday, the Dow lost 1.5% and the Nasdaq composite slid 3.4%.
Tech stocks, retailers and health care companies were among the biggest declines.
Amazon.com, Inc. dropped 4.8%. Apple, Inc. fell 3.7% and Johnson & Johnson, Inc. slipped 1.5%.
In Asia, the Hang Seng in Hong Kong fell 3.1% to 15,369.72, giving up much of the previous day's gains after the Chinese government failed to confirm a rumor on social media that Beijing might start easing anti-virus controls that have disrupted business.
The Shanghai Composite Index fell 0.2% to 2,997.80 and Sydney's S&P-ASX 200 sank 1.8% to 6,857.90.
Japanese markets were closed for a holiday.
Kospi in Seoul rose 0.3% to 2,329.17. India's Sensex lost 0.4% to 60,692.09. New Zealand and most Southeast Asian markets also fell.
The Fed and central banks in Europe and Asia have raised rates aggressively this year to stop inflation that is running at multi-decade highs. Investors worry that might tip the global economy into recession.
U.S. consumer prices rose 6.2% over year earlier in September, the same as the previous month. Core inflation, which excludes volatile food and energy prices to make the trend clearer, accelerated to 5.1% from August's 4.9%.
On Wednesday, the yield on the two-year Treasury, an indicator of market expectations of Fed action, rose to 4.58% from 4.55% before the Fed statement. The yield on the 10-year Treasury, used to set mortgage rates, climbed to 4.10% from 3.98%.
Investors hope signs housing sales and other activity are weakening might encourage Fed officials to ease rate hike plans. But the latest data, especially on hiring, are relatively strong, a sign the Fed might stay aggressive.
Data from payroll processor ADP showed companies added jobs at a faster pace in October than expected.
The government was due to release unemployment data Thursday and a report on the broader jobs market on Friday.
In energy markets, benchmark U.S. crude lost $1.51 to $88.49 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.63 to $90 on Wednesday. Brent crude, the price basis for international oil trading, shed $1.31 to $94.85 per barrel in London. It rose $1.51 the previous session to $96.16 a barrel.
The dollar gained to 148.11 yen from Wednesday's 146.94 yen. The euro declined to 97.70 cents from 98.83 cents.