Asian stock markets had mixed results on Tuesday after Wall Street’s slight decline. The Nikkei 225 in Tokyo saw a drop of 0.8%, while Hong Kong’s Hang Seng rose 1.6%, the Shanghai Composite Index gained 0.9%, and Sydney’s S&P/ASX 200 added 0.5%. The Kospi in Seoul shed 0.3%. Meanwhile, Taiwan fell, Indonesia remained flat, and Singapore gained slightly.
On Monday, there was a tech-driven drop in the S&P 500 index, leading to a decline of 0.4%. Despite being off its recent high from two weeks ago, the index has still experienced a more than 20% growth since mid-October. Yeap Jun Rong of IG commented in a report that there has been moderation from previously overbought technical conditions and extreme bullish sentiment.
Although there were hopes this year that inflation-cooling interest rate hikes—initiated by Europe’s and Asia’s central banks as well as the Federal Reserve—might lead to a recession later and be shorter and shallower than originally anticipated, enthusiasm has now lessened. The S&P 500 reached its peak for the year two weeks ago, as last week marked the index’s first losing week in six. On Monday, the Dow Jones Industrial Average lost under 0.1% to bring it to 33,714.71, while the tech-heavy Nasdaq composite saw a decline of 1.2% to close at 13,335.78.
The Federal Reserve to Evaluate May Inflation Data
The Federal Reserve is expected to release a report this Friday regarding the behavior of inflation in May. This comes after consumer and wholesale price data were previously shared earlier this month.
Many traders are betting that the June inflation data—due to be released next month—will compel the Fed to raise rates by a quarter of a percentage point at its next meeting, which is scheduled to run from July 25-26. The CME Group has provided data supporting these theories.
After already pushing its benchmark lending rate to a 16-year high to counterbalance inflation, the Fed refrained from making any changes at this month’s meeting. While most of Wall Street is anticipating a hike come next month, many think it will be the last one of this cycle.
The Fed has suggested that it may increase rates twice more due to stubbornly high inflation rates—even though they have decreased from last summer’s high.
Oil and Currency Markets
Benchmark U.S. crude (CLQ23, +0.59%) increased by 32 cents in electronic trading on the New York Mercantile Exchange, resulting in $69.69 per barrel. Brent crude (BRNQ23, +0.50%), the price standard for international oil trading, rose by 31 cents in London, equating to $74.66 per barrel.
The dollar (USDJPY, -0.08%) experienced a decline from Monday’s 143.45 yen to 143.40 yen.