Asian shares were mixed amid a busy week that sees the Federal Reserve’s policy meeting and several major reports on U.S. inflation.
HONG KONG — Asian shares were mixed on Tuesday, amid a busy week that saw the release of the Federal Reserve’s policy meeting as well as several key indicators of U.S. inflation.
U.S. futures and oil prices fell.
In Tokyo, the Nikkei average rose 0.1% to 39,092.32 as investors awaited the results of the Bank of Japan meeting, which raised its benchmark interest rate to 0-0.1% from minus 0.1% in March, the first rate hike in 17 years.
Analysts said the market was leaning towards two rate hikes by the end of the year, with a growing view that further increases could come as early as July.
Hong Kong’s Hang Seng Index fell 1.1% to 18,165.21, while the Shanghai Composite Index fell 0.9% to 3,023.46 after trading resumed after the holiday as markets remained cautious ahead of China’s inflation report due on Wednesday.
Australia’s S&P/ASX 200 fell 1.4% to 7,748.30. South Korea’s KOSPI rose 0.3% to 2,709.87.
On Monday, the S&P 500 rose 0.3% to 5,360.79, surpassing the all-time high it reached last week. The Nasdaq Composite also rose 0.3% to 17,192.53, also hitting a record high, while the Dow Jones Industrial Average rose 0.2% to 38,868.04.
Recent economic data has been mixed, and traders are hoping for a modest slowdown short of a recession, which could ease upward pressure on inflation and prompt the Federal Reserve to cut its key interest rate from its tightest level in more than two decades.
But the numbers are difficult to interpret, as Friday’s better-than-expected jobs report was followed on the heels of weaker-than-expected data on U.S. manufacturing and other sectors of the economy. Even in U.S. consumer spending, the heart of the economy, there is still a wide gap between lower-income households, which are struggling to keep up with high inflation, and higher-income households, which are doing much better.
Companies benefiting from the AI boom continue to report strong growth, largely regardless of economic or interest rate trends.
Nvidia, for example, with a market capitalization of about $3 trillion, reversed early Monday declines and rose 0.7%. Its shares surged to more than $1,000 amid the AI boom, but today was its first day of trading since a 1-for-10 stock split made it more affordable for investors.
In the bond market, Treasury yields were mixed ahead of releases later in the week that will show whether inflation improved last month at both the consumer and wholesale levels.
On Wednesday, the Federal Reserve will announce its latest decision on interest rates. Few expect the key rate to move at that point, but policymakers will likely release their latest forecasts for where rates and the economy are headed in the future.
The last time Fed officials issued such a forecast was in March, when they suggested central bank members expected roughly three rate cuts in 2024. That forecast will almost certainly come in lower this time: Wall Street traders are roughly betting on one or two rate cuts in 2024, according to data from CME Group.
In the bond market, the yield on the 10-year Treasury note rose to 4.46% from Friday’s close of 4.43%. The yield on the two-year note, which is more in line with the Fed’s expectations, fell to 4.88% from 4.89%.
Meanwhile, benchmark U.S. crude oil fell 3 cents to $77.71 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, fell 14 cents to $81.49 a barrel.
The U.S. dollar rose to 157.25 yen from 157.04 yen. The euro rose to 1.0770 dollars from 1.0766 dollars.
