Stock market today: Asian stocks are mostly higher after House of Representatives approves debt ceiling deal

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Asian benchmarks were mostly higher on Thursday after the US House of Representatives passed a debt ceiling and budget cuts package to avert a default crisis.

But enthusiasm was dampened by worries about the Chinese economy after recent data on a recovery in the world’s second largest economy and a key driver of regional growth disappointed.

“Equities leveraged in the real economy are likely to underperform following the recent disappointing economic data out of China. If economic data out of China continues to come in below expectations, more participants could start forecasting lower Chinese GDP for the coming quarters,” said ActivTrades’ Anderson Alves.

Japan’s benchmark Nikkei 225 rose 0.8% to close at 31,148.01. Australia’s S&P/ASX 200 rose 0.3% to 7,110.80. South Korea’s Kospi quickly pared its early gains, falling 0.3% to 2,570.80. Hong Kong’s Hang Seng gained almost 0.1% to 18,251.83, while the Shanghai Composite slipped less than 0.1% to 3,202.44.

If the debt deal also passes the Senate, government checks would continue to be issued and it would avert financial turmoil at home and abroad before the deadline on Monday, when the Treasury Department said the US was running out of money to pay off its debt.

Wall Street slid as stocks tumbled on Wednesday amid concerns over global economic strength and global inflation.

The S&P 500 fell 25.69, or 0.6%, to 4,179.83. The Dow Jones Industrial Average fell 134.51, or 0.4%, to 32,908.27 and the Nasdaq Composite lost 82.14, or 0.6%, to 12,935.29.

Wall Street has held up fairly well of late, largely on the back of gains from a handful of tech companies and others caught up in the artificial intelligence craze. The S&P 500 closed May with a slight plus.

Wall Street stocks pared losses in the afternoon after a Federal Reserve official hinted that the central bank could hold rates steady at its next meeting in two weeks.

Fears of an economic slowdown under the burden of significantly higher interest rates are growing. The Federal Reserve has been raising interest rates at a rapid pace since early 2022 in hopes of bringing inflation under control. But high interest rates work by hurting the economy and depressing investment prices.

“We see this as a race for weakness between inflation and economic activity,” said Tony Roth, chief investment officer at Wilmington Trust.

Either inflation must break lower to return to the Fed’s target, which would allow interest rates to be eased, or the economy will plunge into recession. Roth said both the economy and inflation have stayed strong longer than expected: “It’s a very slow race to the bottom.”

In the bond market, the yield on the 10-year government bond fell to 3.62% from 3.70% late Tuesday. It helps set interest rates on mortgages and other major loans that affect the housing and other markets.

The two-year Treasury yield, which is more in line with expectations of Fed action, fell to 4.39% from 4.46%.

In energy trading, the reference price for US crude rose 43 cents to $68.52 a barrel. Brent crude, the international standard, fell 88 cents to $72.66 a barrel.

In forex trading, the US dollar rose to 139.67 Japanese yen from 139.29 yen. The euro fell from $1.0692 to $1.0683.

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` business writer Stan Choe contributed from New York.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama