Rosalind Evans
Asian stocks mostly saw a drop, even with Wall Street’s significant boost from tech giants, as the market’s eyes turn to the forthcoming U.S. consumer price data set to be released later this week.
Japan’s Nikkei 225 saw an uptick of 0.7% in its morning session, hitting 32,686.67. On the contrary, Australia’s S&P/ASX 200 decreased by 0.2% reaching 7,176.30, and South Korea’s Kospi went down by 0.5% to 2,542.91. Hong Kong’s Hang Seng and the Shanghai Composite witnessed declines of 1.0% and nearly 0.3%, respectively.
ActivTrades’ Anderson Alves emphasized the significance of the imminent U.S. data before the Federal Reserve’s verdict next week.
The Federal Reserve contemplates whether to maintain the steady hike in interest rates to target a 2% inflation. This Wednesday will see the U.S. government release the latest insights into consumer prices. Predictions suggest a 3.6% increase in August compared to the previous year.
With the primary interest rate already at its peak in over 20 years, the Fed bases its subsequent decisions on inflation trends and other economic indicators. While inflation has declined from its previous 9% high, economists are wary about achieving the last bit of improvement to meet the Fed’s goal.
Another report set for Thursday will shed light on the spending patterns of U.S. households in retail outlets. This robust spending trend has so far staved off a much-anticipated recession. However, it might also tempt businesses to hike prices, potentially adding to inflationary pressures.
Most market participants predict the Federal Reserve to maintain the current rate in the upcoming meeting, based on CME Group data. But there’s increasing anticipation of another rate hike by year-end and moderated expectations for rate cuts in the upcoming year.
On the U.S. front, the S&P 500 witnessed a 0.7% rise, with the Dow Jones and the Nasdaq composite also seeing gains. Big tech names, including Tesla, Amazon, Meta Platforms, and Charter Communications, dominated the gains. Additionally, Apple’s stock saw an increase, making it a significant market mover due to its high valuation. Qualcomm announced its 5G equipment supply deal with Apple, boosting its stock by 3.9%.
RTX, an aerospace entity, reported a notable decline after revealing challenges with its Pratt & Whitney aircraft engines, anticipating a substantial impact on its pre-tax operating profits. Hostess Brands saw a sharp surge following news of its acquisition by J.M. Smucker, while Alibaba’s U.S. traded shares declined as its former CEO, Daniel Zhang, stepped down from its cloud business segment.
In energy markets, U.S. crude experienced a marginal drop, as did Brent crude. In the currency domain, the U.S. dollar saw a slight rise against the Japanese yen, and the euro recorded a small dip.
As the global market landscape evolves, the interplay between Asian stocks and U.S. Big Tech continues to draw attention. The ebb and flow in various sectors, from energy to tech and even confectionery, reflect the dynamic nature of today’s economy. As stakeholders keep an eagle eye on Federal Reserve decisions and consumer spending patterns, the coming weeks will undoubtedly shed more light on the trajectory of global financial trends.
