Tokyo (AP) – Asian stock markets showed mixed results on Thursday, similar to Wall Street Recent significant gatherings, which lost some traction due to potentially discouraging reports about the US economy.
US futures declined and crude oil prices fell.
The Japanese benchmark Nikkei 225 decreased by 0.2% to 37,658.46, while the Australian S&P/ASX 200 slipped nearly 0.1% to 8,535.10.
In South Korea, following the inauguration of the new president and liberal politician, Kospi surged to 2,829.48. Lee Jae-myung pledged to start his term by resuming talks with North Korea and strengthening the trilateral relationship with the United States and Japan.
Hong Kong’s Hang Seng index rose 0.9% to 23,856.54, whereas Shanghai’s composite remained relatively unchanged at 3,374.30 with less than a 0.1% shift.
On Wednesday, the S&P 500 completed a nearly unchanged trading day at 5,970.81, down 2.8% from its all-time peak. The Dow Jones Industrial Average dipped 0.2% to 42,427.74, while the Nasdaq composite increased by 0.3% to 19,460.49.
In the bond market, there was a noticeable strength as Treasury yields dropped following a disappointing economic update.
Economists were anticipating growth, but last month saw a contraction in activity among US retailers, financial firms, and other service sector companies. The Supply Management Institute noted in a survey that ongoing uncertainties due to tariffs are complicating forecasting and planning.
A subsequent report from ADP indicated that non-government US employers hired significantly fewer workers last month than economists had projected. This might lead to an adverse impact on the more comprehensive employment report from the U.S. Bureau of Labor Statistics, one of Wall Street’s most awaited monthly releases.
Thus far, the US job market has proven remarkably resilient despite prolonged high inflation and ongoing threats from President Donald Trump’s elevated tariffs. However, any weakening could potentially jeopardize the broader economy.
In light of this report, traders are wagering that the Federal Reserve will need to lower interest rates later this year to bolster the economy. The weaker-than-expected ADP report prompted Trump to call on Fed Chairman Jerome Powell to expedite cuts.
“It’s ‘too late’ for Powell to not lower rates now,” Trump expressed on his social media platform. “It’s remarkable!!!”
The Fed has yet to decrease interest rates this year, after previously adjusting them until the end of 2024. Part of the rationale for this pause is the Fed’s desire to assess the economic impact of Trump’s tariffs and inflation levels. While lowering interest rates could stimulate the economy, it may also exacerbate inflation.
Long-term Treasury yields have surged recently for reasons beyond federal control. Investors are demanding higher interest returns as concerns grow about the US government accumulating trillions of dollars in debt due to proposed tax cuts being discussed on Capitol Hill.
Investors seek an agreement to minimize Trump’s tariffs, yet uncertainty remains. Malossyvchovich, the European Union’s chief trade negotiator, met with his American counterpart on Wednesday. US Trade Representative Jamieson Greer attended a gathering of the Economic Co-operation and Development Agency.
In the bond market, the yield on the 10-year Treasury fell to 4.35% from 4.46% on Tuesday. The two-year Treasury yield, which typically aligns closely with traders’ predictions for Fed actions on overnight interest rates, eased from 3.96% to 3.86%.
In early Thursday trades, US crude oil decreased by 8 cents to $62.77 a barrel, while international standard Brent crude rose by one cent to $64.87.
The US dollar increased from 142.78 yen to 142.87. The euro traded at $1.1413, barely moving from $1.1418.
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AP business writer Stan Choe contributed.
Source: apnews.com