Asian stocks are mixed after Wall Street retreats as surprisingly strong US manufacturing data casts doubt on the timing of Federal Reserve interest rate cuts
HONG KONG — Global stocks were mixed Tuesday as Wall Street retreated and surprisingly strong U.S. manufacturing data raised questions about how quickly the Federal Reserve will cut interest rates.
European markets opened mostly higher, but Germany’s DAX subsequently fell, dropping 0.1% to 18,525.79. In the Paris market, CAC40 was flat at 8,206.00. In London, the FTSE 100 index rose 0.3% to 7,976.39.
The S&P 500 futures index fell less than 0.1%, and the Dow Jones Industrial Average fell 0.3%.
In Asian trading, Hong Kong rose 2.4% to 16,931.52. The Shanghai Composite Index fell 0.1% to 3,074.96.
Chinese real estate developer Vanke’s Hong Kong-listed shares fell 12.9% last week after the company announced that its 2023 core profit would fall 50.6% from a year earlier. In a rare case of intervention, state-run banks were asked to provide financial support to Vanke in March.
Tokyo’s Nikkei Stock Average ended 0.1% higher at 39,838.91 yen.
Elsewhere in Asia, South Korea’s Kospi rose 0.2 after data showed the country’s consumer prices rose 3.1% year-on-year in March, matching the previous month’s pace. % to 2,753.16.
Australia’s S&P/ASX 200 index fell 0.1% to 7,887.90, the fastest pace since May 2020, after the country’s manufacturing sector index fell to 47.3 in March from 47.8 in February. Ta.
On Monday, the S&P 500 fell 0.2% from its all-time high to end at 5,243.77. The Dow Jones Industrial Average fell 0.6% from its all-time high to $39,566.85. The Nasdaq Composite was an outlier, rising 0.1% to 16,396.83.
U.S. Treasury yields soared after reports that U.S. manufacturing unexpectedly returned to growth last month. According to the Supply Management Association, the economic slump that lasted 16 months has ended.
This is the latest evidence that the U.S. economy remains strong despite high interest rates. This is good for the stock market because it can help companies increase their profits. However, there is a possibility that upward pressure on inflation will continue. That could mean further hesitation from the Federal Reserve in cutting interest rates, which investors desperately need.
The manufacturing data caused Wall Street traders to temporarily scale back bets on a first rate cut, expected as early as June. Deutsche Bank economists said this remains a “reasonable baseline” expectation, but recent tough comments from Fed officials could suggest that interest rates will remain higher for longer than previously thought. It is said that there is.
The Fed raised its key policy rate to its highest level since 2001 in an effort to slow the economy and hit investment prices enough to curb inflation. Expectations for future interest rate cuts are the main reason the S&P 500 index soared more than 20% from October to March.
Several economic reports are expected to be released this week that could sway the Fed’s thinking, including updates on job openings across the country and the strength of the U.S. service sector. The headliner will be released on Friday, when economists expect a report to show that employment cooled slightly last month.
The slowdown will be welcomed on Wall Street. The economy is expected to remain strong, but not strong enough to push up inflation. Inflation has moderated since its peak about two years ago. But recent progress has been more erratic, with hotter-than-expected reports this year.
In other trading, benchmark U.S. crude oil rose $1.42 to $85.13 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude added $1.36 to $88.76 per barrel.
The dollar fell from 151.68 yen to 151.62 yen. The euro fell to $1.0732 from $1.0745.
