BEIJING (AP) — Asian stock markets sank Monday ahead of a U.S. inflation update that traders worry might lead to more interest rate hikes.

Tokyo, Hong Kong and Seoul declined. Shanghai advanced. Oil prices declined.

Traders hope Tuesday’s inflation data will show upward pressure on U.S. prices is easing, which might encourage the Federal Reserve to ease off efforts to cool business activity and hiring. They worry a strong reading after estimates of 2022 inflation were revised up last week would reinforce plans to keep rates high and possibly increase them.

A strong inflation figure “can move through risk assets like a wrecking ball,” Stephen Innes of SPI Asset Management said in a report.

The Nikkei 225 in Tokyo sank 1.1% to 27,354.81 while the Shanghai Composite Index advanced 0.5% to 3,276.39. The Hang Seng in Hong Kong lost 0.6% to 21,060.77.

The Kospi in Seoul declined 0.9% to 2,447.77 and Sydney’s S&P-ASX 200 shed 0.3% to 7,410.30. New Zealand and Singapore retreated while Jakarta gained.

On Friday, Wall Street’s benchmark S&P 500 index rose 0.2% to 4,090.46. The index ended the week with a loss of 1.1%, its biggest weekly decline since December.

The Dow Jones Industrial Average gained 0.5% to 33,869.27. The Nasdaq fell less than 0.1% to 11,718.12.

Stocks have been rallying since last month on hopes the Fed might start cutting rates as early as late this year. That is despite warnings by Chair Jerome Powell that rates will stay elevated for an extended period until inflation pressures are extinguished.

Other central banks in Europe and Asia also have raised rates to cool inflation.

Wall Street raised its forecast of how high the Fed might raise rates after Powell said last week there is a “significant road ahead” to get inflation down to its 2% target. He warned against expecting inflation to “go away quickly and painlessly.”

The U.S. government revised December inflation to 0.1% over the previous month, up from the earlier estimate of a 0.1% decline. The November figure was raised to 0.2% over the previous month from 0.1%.

Traders expect Tuesday’s report to say consumer prices rose 0.5% in January over the previous month.

The yield on the 10-year Treasury bond, or the difference between the market price and the payout at maturity, widened to 3.73% on Friday from 3.66%.

The yield on the two-year Treasury ticked up to 4.50% from 4.48%. It was at 4.08% just over a week ago and is near its highest level since November.

Equities analysts have cut forecasts of first-quarter earnings for companies in the S&P 500 by 4.5% due to the impact of inflation and slowing economic activity, according to strategists at Credit Suisse.

News Corp. fell 9.4% after the owner of The Wall Street Journal and other media reported weaker quarterly results than expected. Expedia lost 8.6% after reporting weaker profit and revenue for the latest quarter than expected.

Oil prices fell back following a surge Friday after Russia said it would cut production by 500,000 barrels per day next month. Western countries have imposed an upper limit on how much they will allow customers to pay for Russian crude to punish Moscow for its invasion of Ukraine.

In energy markets, benchmark U.S. crude lost 75 cents to $78.97 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.66 to $79.72 on Friday. Brent crude, the price basis for international oil trading, shed 71 cents to $85.68 per barrel in London. It gained $1.89 on Friday to $86.39.

The dollar gained to 131.85 yen from Friday’s 131.50 yen. The euro declined to $1.0666 from $1.0672.

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