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Asian stocks were mixed on Thursday after U.S. stocks fell on concerns that what appeared to be a blip in the fight to curb inflation could be a worrisome trend.
Oil prices rose slightly and US futures were unchanged.
South Korean stocks were little changed after the ruling Conservative party suffered a crushing defeat in a general election. The Kospi rose less than 0.1% to 2,706.96.
The result was a major political blow to President Yoon Suk Yeol, and Prime Minister Han Duck-soo and all of Yoon's senior presidential advisers except those in charge of security issues submitted their resignations on Thursday.
Elsewhere in Asia, the Nikkei 225 in Tokyo fell 0.4% to 39,442.63 and the Hang Seng in Hong Kong fell 0.1% to 17,118.27.
The Shanghai Composite Index rose 0.2% to 3,032.01 and the S&P/ASX 200 fell 0.4% to 7,813.60.
Bangkok's SET lost 0.3% and Taiwan's Taiex lost 0.1%.
On Wednesday, the S&P 500 fell 0.9% to 5,160.64. The Dow Jones Industrial Average fell 1.1% to 38,461.51 and the Nasdaq Composite fell 0.8% to 16,170.36.
Treasury yields jumped as bond prices fell, adding pressure to the stock market after a report showed inflation was higher than economists expected last month. It is the third straight report to suggest that progress in reducing high inflation may be stalling.
This is painful for shoppers as prices may be even higher in store. On Wall Street, this is raising fears that the Federal Reserve will hold off on the rate cuts that traders want and have been betting on.
The Fed has been waiting for more evidence showing that inflation is falling sustainably toward its 2% target. After an encouraging slowdown last year, there are now fears that inflation could stagnate after inflation reports for January, February and March all came in hotter than expected, as did data on the broader economy.
Prices for everything from bonds to gold fell immediately after inflation data was released this morning.
The yield on the 10-year Treasury note rose to 4.54% from 4.36% late Tuesday, back to November levels. The two-year Treasury yield, more closely aligned with expectations of Fed action, shot even higher, rising to 4.97% from 4.74%.
Traders sharply reduced their bets that the Fed could start cutting interest rates in June. Earlier this year they predicted six or more cuts by 2024.
High interest rates have a negative impact on inflation by slowing the economy and weighing on investment prices. There are fears that interest rates that are too high for too long could trigger a recession.
Wall Street's biggest losers on Wednesday included real estate funds, utilities and other stocks that tend to suffer the most from high interest rates.
Real estate stocks in the S&P 500 fell 4.1%, posting by far the largest loss among the 11 sectors that make up the index. That included a 6.1% decline for office owner Boston Properties and a 5.3% decline for Alexandria Real Estate Equities.
Higher interest rates could cool the housing industry by making mortgages more expensive. Homebuilder DR Horton fell 6.4%, Lennar fell 5.8% and PulteGroup fell 5.2%.
Major U.S. companies are lining up to report earnings from the first three months of the year, and Delta Air Lines helped kick off earnings season by delivering better-than-expected results.
The airline said it is seeing strong demand for flights around the world and expects that strength to continue through the spring. However, they also refrained from raising the profit forecast for the full year. The stock rose as much as 4% during the morning before posting a loss of 2.3%.
In other trading early Thursday, U.S. benchmark crude oil price was unchanged at $86.21 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 2 cents to $90.50 a barrel.
The US dollar fell to 153.10 Japanese yen from 153.17 yen, near a 34-year high. The yen has weakened on expectations that the gap between interest rates in Japan, which are close to zero, and those in the United States will remain wide for the foreseeable future.
The euro fell from $1.0746 to $1.0734.
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