TOKYO (AP) – Asian stocks traded mixed Thursday amid growing pessimism among investors about an impending interest rate cut in the United States.
Japan's benchmark Nikkei Stock Average rose 0.5% in morning trading to 35,637.01. Australia's S&P/ASX 200 index fell 0.5% to 7,357.40. South Korea's Kospi rose 0.6% to 2,450.00. Hong Kong's Hang Seng Index fell nearly 0.2% to 15,251.64, while the Shanghai Composite Index fell 2.3% to 2,768.90.
Wall Street fell on new signals that the U.S. Federal Reserve may have become too optimistic about when it will cut interest rates.
The S&P 500 fell 26.77 points, or 0.6%, to 4,739.21. It was the index's second consecutive year of stumbling after finishing near its all-time high for its 10th of the past 11 winning weeks.
The Dow Jones Industrial Average fell $94.45, or 0.3%, to $37,266.67, and the Nasdaq Composite Index fell $88.73, or 0.6%, to $14,855.62.
Rising yields in the bond market have once again put downward pressure on stock prices.Yields rose after the report showed Sales at US retail stores Economic growth in December was stronger than economists expected.
That's good news for an economy that has defied recession predictions, but could continue to put upward pressure on inflation. As a result, after raising interest rates sharply over the past two years, the Fed could be forced to wait longer than traders are expecting to begin cutting rates. Lower interest rates would ease pressure on the economy and financial system, while also reducing investment prices.
The 10-year Treasury yield jumped immediately after the retail sales report, rising from 4.06% to 4.10% on Wednesday. Rising yields could weigh on corporate profits, while also reducing investors' willingness to pay higher prices for stocks.
Rising yields have a negative impact on all types of investments, and high-growth stocks tend to be hit the hardest. Tesla's 2% decline and Amazon's 0.9% decline were the most heavily weighted in the S&P 500 index. Russell 2000 index small companies also fell by 1.5%, and then the decline narrowed to 0.7%.
Two-year Treasury yields, which more accurately reflect expectations for the Fed, also rose. It rose to 4.34% from 4.22% on Wednesday as traders lowered their expectations that the Fed's first rate cut would occur in March. Traders are now betting the odds are less than 60%, down from about 70% a month ago, according to CME Group data.
A senior Federal Reserve official said: Governor Christopher Wallersaid on Tuesday that the central bank could take its time before making its next move on interest rates, given how resilient the economy remains.
“These comments indicate that while a rate cut is on the table as early as March, such a step is not a done deal,” said Amy Yang, an economist at Deutsche Bank. Ta.
On Wednesday, President of the European Central Bank In his speech, he warned of the risk of cutting interest rates too soon.
Interest rates are one of the main instruments that determine stock prices. Another is corporate profits, with multiple companies including U.S. Bancorp and Big 5 Sporting Goods reporting weaker earnings than analysts expected on Wednesday.
Charles Schwab reported stronger earnings for its latest quarter than analysts expected, but the stock still fell 1.3%. Sales were lower than expected, but analysts said the better-than-expected earnings were likely due in part to the easing of tax rates.
spirit airlines It came under heavy pressure again, falling 22.5%. JetBlue's stock price nearly halved a day earlier after a U.S. judge blocked the acquisition by JetBlue Airways over concerns it would lead to soaring airfares. JetBlue fell 8.7%.
In energy trading, benchmark U.S. crude oil rose 20 cents to $72.76 a barrel. Brent crude oil, the international standard, remained unchanged at $77.88 per barrel.
In currency trading, the US dollar depreciated slightly from 148.11 yen to 148.03 yen. The euro rose to $1.0894 from $1.0886.
AP Business Writer Stan Cho contributed from New York.Yuri Kageyama is currently appearing on X https://twitter.com/yurikageyama.