NEW YORK, Feb 23 (Reuters) - Global equities were lower while crude oil edged up as traders braced for higher interest rates amid economic data that continued to show the strength of the U.S. economy and which validated the Federal Reserve's tight monetary policy stance.
A U.S. Labor Department report on Thursday showed that new claims for unemployment benefits unexpectedly fell last week, pointing to a persistently tight labor market.
The readings for the fourth-quarter personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, was revised upward to 3.7%, indicating inflation was much stronger than initially thought and helping to stoke bearish sentiment among traders.
Minutes of the Federal Reserve's last meeting released on Wednesday showed that officials favored a moderation in the pace of rate hikes although they indicated that containing high inflation would be key in how much further rates need to rise.
"The Fed minutes yesterday were a bit hawkish and they said ongoing rate hikes would be necessary and that should obviously be negative for the market," said Sandy Villere, portfolio manager at Villere & Co in New Orleans.
The MSCI world equity index (.MIWD00000PUS), which tracks shares in 50 countries, was down 0.29%. European stocks (.STOXX) were up at just 0.06%.
On Wall Street, the Nasdaq erased earlier gains on better-than-expected revenue at chipmaker Nvidia Corp (NVDA.O). The results drove the company's shares up 13%, along with shares of other semiconductor manufacturers.
The Dow Jones Industrial Average (.DJI) fell 0.55% to 32,864.83, the benchmark S&P 500 (.SPX) lost 0.28% to 3,979.94 and the Nasdaq Composite (.IXIC) dropped 0.3% to 11,473.04.
"The market is becoming a stock-pickers market where if companies are putting out good numbers, they're being rewarded even now that interest rates are going higher," Villere added.
Oil prices firmed more than 1% before paring some gains, with Russian supply curbs partially offsetting an expected rise in U.S. inventories.
Brent crude futures rose 2.36%, to $82.50 a barrel, while West Texas Intermediate crude futures (WTI) advanced 2.35% to $75.69 after six sessions of losses.
U.S. Treasury yields edged lower in choppy trading, with those on the 10-year pulling back from three-month highs, as investors have priced in strong economic data.
Benchmark 10-year Treasury notes were down at 3.904%, while the yield curve measuring the gap between the two- and 10-year Treasury notes was still inverted at minus 77.90 basis points, indicating a looming recession.
The dollar retained its strength against its major peers. The dollar index rose 0.201%, with the euro down 0.19% at $1.0581.
Safe-haven gold prices slipped to their lowest in about two months as the U.S. dollar climbed. Spot gold dropped 0.2% to $1,820.95 an ounce, while U.S. gold futures fell 0.45% to $1,823.70 an ounce.
