Stock market today: Asia follows Wall Street’s decline after Fed notes dampen hopes of an end to rate hikes

BEIJING (`) – Asian stocks trailed Wall Street’s decline on Thursday after notes from a US Federal Reserve meeting dashed hopes of an end to interest rate hikes.

Hong Kong and Tokyo lost more than 1%. Shanghai, Seoul and Sydney also withdrew. Oil prices fell.

The Wall Street benchmark S&P 500 was down 0.8% on Wednesday after minutes of the Fed’s last meeting suggested that board members were unsure what to do after raising interest rates to a two-decade high. Traders had hoped they would conclude inflation was under control and last month’s rate hike was the last.

Fed officials face a “difficult balancing act” between “the risk of unintended over-tightening of monetary policy and the cost of inadequate monetary policy,” Mizuho Bank’s Tan Boon Heng said in a report.

The Shanghai Composite Index fell 0.4% to 3,136.17 and Tokyo’s Nikkei 225 fell 1.2% to 31,379.24. Hong Kong’s Hang Seng lost 1.6% to 18,018.20 after falling more than 2% in early trade.

Seoul’s Kospi lost 0.9% to 2,502.75 and Sydney’s S&P ASX 200 fell 0.8% to 7,135.70.

The New Zealand and Southeast Asian markets fell.

On Wall Street, the S&P 500 fell to 4,404.33, compounding the previous day’s 1.2% decline.

The Dow Jones Industrial Average lost 0.5% to 34,765.74. The Nasdaq Composite fell 1.1% to 13,474.63.

The bond market pulls money out of stocks as rising interest rates increase the yield, or the difference between the price and the payout at maturity.

Yields continued to widen after the release of Fed banknotes fueled expectations of another potential rate hike. When safer bonds pay higher yields, investors often feel less incentive to buy stocks, which are more volatile in price.

At a news conference on Wednesday, Fed Chair Jerome Powell said that Fed officials no longer forecast a recession by the end of the year, but instead see an economic slowdown with downside growth risks and upside inflation risks.

Investors’ hopes were buoyed by better-than-expected US employment and consumer spending.

Critics have warned that Wall Street was too early to hope that inflation would be under control and rate hikes to cool economic activity would end.

Wall Street retreated this month on those concerns and expectations that interest rates could stay high longer than expected.

Big tech stocks and other assets thought to be particularly vulnerable to higher interest rates were among the biggest losers on Wednesday. Tesla fell 3.2%. Facebook’s parent company, Meta Platforms, lost 2.5% and Amazon lost 1.9%.

A Expected strong US Retail Sales report helped trigger the decline by suggesting there is still upward pressure on prices.

The yield on the 10-year Treasury bond rose to 4.26% from 4.22% late Tuesday. It’s back to near the level it was when the Great Recession of 2007-2009 caused interest rates to plummet. The 10-year yield helps set interest rates on mortgages and other major loans.

The 10-year Treasury Inflation Protected Security, which accounts for inflation, is at its highest level since 2009, according to Tradeweb.

Intel stock fell 3.6% after Intel and Tower Semiconductor agreed to call off Intel’s $5.4 billion acquisition of the Israeli chipmaker. The deal met with opposition from Chinese regulators.

Agilent Technologies fell 3.4% despite earnings for the most recent quarter coming in higher than analysts had expected. His forecasts for upcoming results, including full-year sales, fell short of expectations. It pointed to a difficult economy, particularly in China.

Target and TJX, the company behind TJ Maxx and Marshalls, helped limit the market’s losses. Target increased by 3%and TJX rose 4.1% after both reported higher-than-analysts’ expected earnings for the spring.

In energy markets, the reference price for US crude rose 5 cents to $79.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.61 to $79.38 on Wednesday. Brent crude, the price base for international oils, rose 9 cents to $83.54. In the previous session, the price fell $1.44 to $83.45 a barrel.

The dollar rose to 146.38 yen from 146.24 yen on Wednesday. The euro remained stable at $1.0868.