Asian stocks mixed amid weak China data after Wall Street closes the best week of 2024

HONG KONG — Asian stock markets were mixed on Monday, with several major markets closed for a holiday, while US stocks closed their best week of the year and hit record highs.

Hong Kong’s Hang Seng fell 0.3% to 17,312.37 after data released over the weekend showed a slowdown in China’s economy in August as factory output, retail sales and investment figures fell short of expectations. Meanwhile, the unemployment rate unexpectedly rose to a six-month high, adding to the challenges facing the fragile economy.

“The drums of a deeper economic slowdown are getting louder and it is time for China’s leaders to decide whether to take action or risk sliding further into stagnation,” Stephen Innes of SPI Asset Management said in a commentary.

Australia’s S&P/ASX 200 rose 0.4% to 8,133.40.

Markets in Japan, China and South Korea were closed for a holiday.

Investors will be closely watching the Federal Reserve’s policy meeting on Tuesday and Wednesday, when the central bank is expected to announce its first rate cut since 2020. The Bank of Japan’s policy meeting on Thursday and Friday is expected to leave Japanese interest rates unchanged.

In currency trading, the Japanese yen strengthened against the greenback, with the dollar falling to 140.53 yen from 140.82 yen. The euro was at $1.1092, up slightly from $1.1076.

US futures and oil prices rose.

Friday is the S&P 500 rose 0.5% to 5,626.02 for its fifth straight gain and is just 0.7% below its all-time high reached in July. Rallies for Microsoft, Broadcom and other big tech stocks helped the company recover nearly all of its losses from last week, which is the worst in almost 18 months.

The Dow Jones Industrial Average rose 0.7% to 41,393.78 and the Nasdaq Composite rose 0.7% to 17,683.98.

Stocks also got support from the bond market, where Treasury yields fell ahead of this week’s Federal Reserve meeting. Wall Street’s consensus is that the Fed the first cut in interest rates in more than four years, Wednesday, and traders are again holding out hope that it will provide more relief than usual.

The Federal Reserve is keeping its key interest rate at its highest level in two decades, hoping to slow the economy enough to suppress high inflation. inflation Now that the Fed has fallen significantly from its peak two summers ago, it has said it can focus more on strengthening the slowing labor market And economy.

How much to cut rates will be a delicate balancing act for the Fed: cutting them would ease pressure on the economy, but could also fuel inflation. Reports earlier this week showed that there may be underlying upward pressure on inflation, which initially led traders to revise down their expectations about the size of the Fed’s upcoming move.

On Friday, however, traders saw about a coin-flip chance that the Fed could deliver a big cut of a half percentage point, rather than the more traditional quarter percentage point, according to data from CME Group. The federal funds rate currently trades in a range of 5.25% to 5.50%.

The yield on the 10-year Treasury note fell to 3.65% from 3.68% last Thursday. The yield on the two-year note, which more closely aligns with expectations for Fed action, fell more sharply to 3.58% from 3.65%.

In energy trading, U.S. benchmark crude rose 22 cents to $67.97 a barrel. Brent crude, the international standard, rose 16 cents to $71.77 a barrel.

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AP writer Stan Choe contributed.