While stocks were mixed in Asia, Tokyo’s Nikkei average closed at another record high on Wednesday as investors awaited further comments from Federal Reserve Chairman Jerome Powell before Congress.
Japan’s stock index rose 0.6 percent to close at 41,831.99, after closing at a record high on Tuesday and hitting an intraday high of 41,889.16 on Wednesday.
The Nikkei stock average has risen nearly 30% over the past year and 5% over the past three months.
Investors are buying up technology stocks amid growing enthusiasm about the potential of artificial intelligence, and export-oriented companies are also reaping big gains as the Japanese yen’s weakness against the U.S. dollar has boosted profits.
In Hong Kong, the Hang Seng Index fell 0.2% to 17,484.85, while the Shanghai Composite Index rose 0.6% to 2,940.88.
China reported that its consumer price index fell to 0.2% in June from 0.3% in May, weaker than expected due mainly to lower food prices other than pork.
“Weak consumer confidence continues to push spending towards better value for money purchases, while competition in the EV sector continues to drive down prices, keeping overall inflation in check,” Lin Song of ING Economics said in a commentary.
Australia’s S&P/ASX 200 fell 0.2% to 7,816.80.
In Seoul, the KOSPI was little changed at 2,867.99. Taiwan’s Taiex rose 0.5% and India’s Sensex fell 0.7%.
On Tuesday, the S&P 500 and Nasdaq Composite Index each rose 0.1%, hitting record highs for the second time this week.
Overall, the S&P 500 rose 4.13 points to 5,576.98. The Nasdaq added 25.55 points to close at 18,429.29. The Dow lost 0.1% to 39,291.97.
Stocks have risen steadily in recent months, with the S&P 500 index hitting 36 new records so far this year.
Testifying before the Senate Banking Committee on Tuesday, Powell reiterated that inflation has eased significantly over the past two years but remains above the central bank’s 2% target. He also warned that there is a risk that the Fed will cut interest rates too late or too little, either scenario potentially weakening the economy and job market.
Powell is scheduled to testify before the House Financial Services Committee later on Wednesday. His testimony comes ahead of new inflation updates due to be released later this week.
Traders still expect there’s a 70% chance the central bank will cut its key interest rate as early as September, according to CME Group data.
In the bond market, government bond yields rose slightly. The yield on the 10-year Treasury note rose to 4.30% from Monday’s close of 4.28%.
The Fed remains cautious about raising interest rates, keeping its benchmark interest rate at its highest level in more than two decades as it closely monitors for further signs that inflation remains subdued.
While prices have fallen sharply over the past two years as the Fed has raised interest rates, the central bank’s goal is to allow inflation to stabilize toward its 2% target without slowing economic growth too much.
Interest rates have been hovering around 3%, continuing to put pressure on consumers, especially those on lower incomes.
Wall Street expects consumer prices to have fallen to 3.1% in June from 3.3% in May when it releases data on Thursday. Wholesale-level inflation, before costs are passed on to consumers, is due to be released on Friday.
Traders are also keeping an eye on several upcoming earnings reports this week, including Delta Air Lines, which is due to report results on Thursday.
JPMorgan, Citigroup and Wells Fargo are due to report earnings on Friday, and those releases could provide more information about consumer debt levels and whether banks are worried about potential payments or late payments.
Benchmark U.S. crude oil fell 47 cents to $80.94 a barrel in electronic trading on the New York Mercantile Exchange early Wednesday.
Brent crude, the international standard, fell 56 cents to $84.10 a barrel.
The U.S. dollar rose to 161.45 yen from 161.34 yen. The euro rose to 1.0821 dollars from 1.0813 dollars.
