Stock market today: Asian shares are mostly lower ahead of Fed decision on interest rates

Jun 11, 2024, 12:28 AM | Updated: 10:04 pm

BANGKOK (AP) — Shares were mostly lower Wednesday in Asia ahead of a decision by the Federal Reserve on interest rates.

In Japan, higher inflation and falling wages raised questions about how the central bank can navigate away from near-zero interest rates. The Bank of Japan will issue a policy decision on Friday. In March, it raised its benchmark rate from minus 0.1% to a range of zero to 0.1%, the first such increase in 17 years.

The government reported that producer prices rose 2.4% in May, as the yen’s weakness against the U.S. dollar raises costs for imports of fuel and manufacturing components. At the same time, the latest data show real wages fell in April for the 25th straight month.

The worry is that the Bank of Japan will be constrained from raising interest rates out of concern that higher prices will depress consumer spending, hurting the overall economy.

Tokyo’s Nikkei 225 index lost 0.6% to 38,899.44.

Chinese shares also fell, as the latest inflation data suggested persisting weakness in demand.

The Hang Seng index in Hong Kong sank 1.5% to 17,913.10 while the Shanghai Composite index was down less than 1 point to 3,027.41.

Australia’s S&P/ASX 200 shed 0.6% to 7,710.90. In Bangkok the SET edged 0.1% lower.

Gains in technology shares pushed prices higher in South Korea, where the Kospi rose 0.5% to 2,718.86, and in Taiwan, whose Taiex jumped 1.2%.

Trading was subdued on Tuesday on Wall Street ahead of a key inflation report and the Federal Reserve’s policy decision.

The S&P 500 rose 0.3% to 5,375.32, driven largely by gains in tech stocks. The tech-heavy Nasdaq composite rose 0.9% to 17,343.55. Both indexes set record highs for the second straight day.

Apple surged 7.3% after highlighting its push into artificial intelligence technology.

The Dow Jones Industrial Average lagged the market. It slipped 120.62 points, or 0.3%, to 38,747.42.

The key events for the market this week come on Wednesday, when the U.S. releases its latest update on inflation at the consumer level and the Federal Reserve announces its latest update on interest rates. The U.S. will also release its latest update on prices at the wholesale level on Thursday.

Wall Street expects the government’s consumer price index to remain unchanged at 3.4% in May. Inflation as measured by CPI is down sharply from its peak at 9.1% in 2022, but it has seemingly stalled around 3%. That has complicated the Fed’s goal of taming inflation back to its target rate of 2%.

The Fed has held its main interest rate at its highest level in more than two decades and Wall Street is currently hoping for one or two cuts to that rate this year. Virtually no one expects the Fed to move its main interest rate at its current meeting, which started Tuesday. Policymakers will be publishing their latest forecasts on Wednesday for where they see interest rates and the economy heading.

When Fed officials released their last projections in March, they indicated the typical member foresaw roughly three cuts to interest rates in 2024. That projection will almost certainly fall this time around.

Data on the economy have come in mixed recently, and traders are hoping for a slowdown that stops short of a recession and is just right in magnitude.

The economy has remained resilient with support from a strong jobs market and consumer spending. Consumers are becoming increasingly stressed, especially those with lower incomes, and retailers have been warning investors about the potential impact to earnings and revenue. The U.S. jobs market has been showing some signs of cooling, which could ease inflation but put more stress on consumers.

Affirm Holdings climbed 11% on news that the buy now, pay later company will be integrated into Apple Pay.

Paramount Global, the media company that owns the Paramount movie studio, CBS as well as several cable networks, dropped 7.8% following reports that talks to merge the company with Skydance Media had fallen apart.

In other trading early Wednesday, benchmark U.S. crude oil climbed 44 cents to $78.34 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, was up 36 cents at $82.28 per barrel.

The U.S. dollar rose to 157.23 Japanese yen from 157.14 yen. The euro slipped to $1.0738 from $1.0740.


AP Business Writer Damian J. Troise contributed.


Associated Press

A U.S. envoy visits Hanoi days after Putin, saying US-Vietnam trust is at ‘all-time high’

HANOI, Vietnam (AP) — A senior U.S. diplomat held talks in Vietnam on Saturday and said that the trust between the two countries was at an “all-time high,” just days after Russian President Vladimir Putin’s state visit to Hanoi. U.S. Assistant Secretary of State for East Asia and Pacific Affairs Daniel Kritenbrink insisted that his […]

13 hours ago

Associated Press

US will ‘gradually’ resume avocado inspections in conflictive Mexican state, ambassador says

MEXICO CITY (AP) — U.S. government inspections of avocados and mangoes in the Mexican state of Michoacan will “gradually” resume, U.S. Ambassador Ken Salazar announced Friday, a week after they were suspended over an assault on inspectors. The U.S. Agriculture Department inspectors “will gradually begin to return to the packing plants following recent aggression against […]

1 day ago

Associated Press

Stock market today: Global shares mostly decline as Nvidia weighs on Wall Street

TOKYO (AP) — Global shares were mostly lower Friday after a retreat on Wall Street, where a drop in Nvidia stock pulled stocks lower. France’s CAC 40 dipped 0.1% to 7,661.64 and Germany’s DAX fell nearly 0.2% to 18,227.44. Britain’s FTSE 100 declined 0.3% to 8,251.91. The future for the Dow Jones Industrial Average edged […]

2 days ago

Associated Press

Treason trial of Russian American woman opens as tensions rise between Washington and Moscow

MOSCOW (AP) — The trial of a Russian American dual citizen whom Russia accuses of treason opened on Thursday as tensions rise between Washington and Moscow, including over the arrests of two American journalists. The trial is being held behind closed doors in Yekaterinburg, in the same court that next week is to begin hearing […]

3 days ago

Associated Press

Stock market today: Asian stocks mostly lower after US markets were closed for Juneteenth

HONG KONG (AP) — Asian stocks mostly fell Thursday in thin trading after U.S. markets were closed Wednesday in observance of Juneteenth. U.S. futures and oil prices were mixed. Tokyo’s Nikkei 225 index edged 0.1% higher to 38,324.10. The Hang Seng in Hong Kong shed 0.5% to 18,336.76. The Hang Seng tech index retreated 1.4%, […]

3 days ago

Associated Press

Tropical Storm Alberto weakens over northeast Mexico after heavy rains killed 3

TAMPICO, Mexico (AP) — Tropical Storm Alberto, the season’s first named storm, weakened Thursday as it moved inland over northeast Mexico after bringing heavy rains to parts of the parched region and leaving at least three dead. The storm was weakening rapidly over land and was downgraded to a tropical depression by the U.S. National […]

3 days ago

Stock market today: Asian shares are mostly lower ahead of Fed decision on interest rates