BEIJING (AP) – Asian stocks followed Wall Street on Thursday after a memo from the US Federal Reserve (Fed) meeting cut hopes of an end to rate hikes.
Hong Kong and Tokyo fell more than 1%. Shanghai, Seoul and Sydney also withdrew. Crude oil prices fell.
Wall Street’s benchmark S&P 500 index fell 0.8% on Wednesday. Minutes of the latest Fed meeting Board members suggested they were at a loss as to what to do after raising key lending rates to their highest level in 20 years. Traders had hoped to conclude that inflation was subdued and last month’s rate hike was the last.
Mizuho Bank’s Tan Bun Heng said in a report that Fed officials are “struggling to strike a difficult balance between the risks of inadvertently tightening policy too much and the costs of doing too little.” ‘, he said.
The Shanghai Composite Index fell 0.4% to 3,136.17, while the Nikkei Stock Average in Tokyo fell 1.2% to 31,379.24. Hong Kong’s Hang Seng fell 1.6 percent to 18,018.20 after falling more than 2 percent in early trading.
Seoul’s KOSPI fell 0.9% to 2,502.75, while Sydney’s S&P-ASX 200 fell 0.8% to 7,135.70.
New Zealand and Southeast Asian markets retreated.
On Wall Street, the S&P 500 index fell to 4,404.33, adding to the previous day’s 1.2% decline.
The Dow Jones Industrial Average fell 0.5% to $34,765.74. The Nasdaq Composite fell 1.1% to 13,474.63.
The bond market is pulling money out of equities because rising interest rates have increased the yield, or the difference between the price and the amount paid at maturity.
The release of the Fed notes raised expectations of a possible rate hike, further boosting yields. Investors are often less motivated to buy more volatile stocks when safer bonds offer higher returns.
Fed Chairman Jerome Powell said at a news conference on Wednesday that Fed staff no longer expect a recession by the end of the year, but that growth risks are slanted to the downside, inflation risks are slanted to the upside, and the economy will slow. said.
Investor expectations are supported by unexpectedly strong US employment and consumer spending.
Critics warn that Wall Street was prematurely embracing hopes that inflation would be contained and interest rate hikes to cool economic activity would end.
Wall Street this month backed off on those concerns and the idea that interest rates could stay higher than expected for longer.
On Wednesday, big tech stocks and other investments seen as particularly vulnerable to rising interest rates suffered the biggest losses. Tesla fell 3.2%. Facebook parent company Metaplatforms fell 2.5%, while Amazon fell 1.9%.
a Strong report on US retail sales expected It suggested that upward pressure on prices still existed, triggering price declines.
The 10-year Treasury yield rose to 4.26% from 4.22% late Tuesday. It is again approaching the levels seen when interest rates crashed during the Great Recession of 2007-2009. The 10-year yield is useful for setting interest rates on mortgages and other important loans.
The inflation-adjusted 10-year Treasury inflation protection is at its highest level since 2009, according to Tradeweb.
Intel’s stock fell 3.6%, trailing the company and Tower Semiconductor. Agreed to end Intel’s $5.4 billion takeover of Israeli chip maker. The deal faced resistance from Chinese regulators.
Agilent Technologies fell 3.4% after it said its latest quarter earnings were stronger than analysts expected. Future earnings forecasts, including full-year sales, fell short of expectations. In particular, he pointed out the difficulties of the Chinese economy.
Target and TJX, which runs TJ Maxx and Marshalls, helped limit market losses. 3% increase targetTJX rose 4.1% after both companies reported stronger spring earnings than analysts had expected.
In energy markets, benchmark US crude rose 5 cents to $79.42 a barrel on the New York Mercantile Exchange electronic trading. It fell $1.61 to $79.38 on Wednesday. Brent crude, the benchmark for international oil prices, climbed 9 cents to $83.54. It fell $1.44 from the previous trade to $83.45 per barrel.
The dollar rose to 146.38 from 146.24 on Wednesday. The euro stabilized at $1.0868.