Stocks fell in Asia on Wednesday after Wall Street fell on fears the Federal Reserve will need to hold the brakes on the economy to rein in inflation, risking a sharp recession. Oil prices were mixed.
Tokyo’s Nikkei 225 index fell 0.6% to 27,727.53 and Seoul’s Kospi index fell 0.2% to 2,388.95. The Shanghai Composite lost 0.4% to 3,199.69, while Australia’s S&P/ASX 200 fell 0.6% to 7,245.20.
Hong Kong’s Hang Seng Index gained 0.2% to 19,469.46. Shares fell 0.2% in Mumbai but rose 0.1% in Bangkok.
China reported that its imports and exports fell in November as global demand weakened and anti-virus controls weighed on the second largest economy.
Customs data showed exports plunged 9% from a year earlier, worsening from October’s 0.9% drop. Imports fell 10.9%, below the 0.7% drop in the previous month. Chinese trade had been forecast to weaken as global demand cooled after the Federal Reserve and central banks in Europe and Asia raised interest rates to curb rising inflation.
On Tuesday, the S&P 500 fell 1.4%, its fourth straight loss, to 3,941.26 and the tech-heavy Nasdaq sank 2% to 11,014.89.
The Dow Jones Industrial Average lost 1% to 33,596.34, while the Russell 2000 fell 1.5% to 1,812.58.
Technology stocks, communication companies and retailers had some of the biggest losses. Apple fell 2.5%, Disney fell 3.8% and AutoZone fell 2.8%.
Small company stocks also fell, sending the Russell 2000 Index down 1.5%. The major indices are on track for a weekly loss after posting two consecutive weekly gains.
Bond yields fell. The 10-year Treasury yield fell to 3.52% from 3.58% late Monday.
Several companies made big moves following financial updates and purchase announcements.
Utility company NRG Energy slumped 15.1% after announcing it will spend $2.8 billion in cash and take on $2.4 billion of debt to buy Vivint Smart Home.
Jewelry company Signet jumped 20.2% after raising its earnings and revenue forecasts for the year.
The broader market slide comes a day after stocks fell as stronger-than-expected readings on the economy raised concerns that the Fed has a ways to go in reining in inflation. The Fed is doing it by intentionally slowing down the economy with higher interest rates.
Investors are closely watching economic data and company announcements to get a better idea of how the economy is handling stubbornly high inflation. They are also trying to determine if inflation is falling at a rate that allows the Fed to moderate interest rate increases. The Fed’s policy risks slowing down the economy too much and sending it into a recession.
The Fed will meet next week and is expected to raise interest rates by half a percentage point. It has raised its benchmark rate six times since March, taking it to a range of 3.75% to 4%, the highest in 15 years. Wall Street expects the benchmark rate to hit a maximum range of 5% to 5.25% by mid-2023.
Wall Street will get a weekly update on jobless claims on Thursday. The labor market has been one of the strongest pockets of the economy.
On Friday, the government will publish its November report on producer prices. That will give investors more information about how inflation is affecting companies.
The University of Michigan will release its December survey on consumer confidence on Friday.
In other trading on Wednesday, benchmark US crude oil gained 1 cent to $74.26 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude oil, the international standard for pricing, gained 15 cents to $79.50 a barrel.
The dollar rose to 137.23 Japanese yen from 136.94 yen. The euro fell to $1.0465 from $1.0468.
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AP business writer Damian J. Troise contributed.
