Stock market today: Asian markets are mixed, Shanghai falls as Fitch lowers China’s rating outlook
BANGKOK– Stocks in Asia were mixed on Wednesday after US stock indexes remained near a standstill ahead of some potentially market-moving reports.
Hong Kong’s Hang Seng rose 1.7% to 17,115.94, while the Shanghai Composite index lost 0.8% to 3,026.11 after Fitch Ratings cut its outlook for China’s public finances.
Fitch’s report cited increased risks due to China’s shift away from dependence on its troubled real estate sector and rising government debt.
“There is little clarity on reform measures to support fiscal consolidation in the medium term,” the report said.
Tokyo’s Nikkei 225 lost 0.5% to 39,581.81 and the S&Sydney’s P/ASX 200 rose 0.3% to 7,848.50.
India’s Sensex rose 0.3% and Bangkok’s SET rose 0.5%.
The markets in South Korea were closed due to elections.
On Tuesday the S&The P500 rose 0.1% to 5,209.91 after barely rising the day before. The Dow Jones Industrial Average fell less than 0.1% to 38,883.67, while the Nasdaq index rose 0.3% to 16,306.64.
Later Wednesday, the US will release its long-awaited update on consumer inflation. Other reports on inflation will also be released this week, and major US companies will begin reporting how much profit they made during the first three months of the year.
The dominant question hanging over Wall Street is whether inflation will cool enough to convince the Federal Reserve to make the rate cuts that traders have been craving and betting on.
“There is a palpable sense of nervousness among investors as they exercise some caution, concerned about the possibility of inflation rates being higher than expected,” Stephen Innes of SPI Asset Management said in a commentary.
Some doubts have arisen after a series of better-than-expected reports on the economy, and traders now expect only two or three rate cuts this year. Some even talk about the possibility of zero. That’s down from forecasts at the start of the year of six or seven cuts, according to CME Group data.
The Fed’s key interest rate is at its highest level in more than two decades and there is a risk that if rates remain too high for too long, it could trigger a recession.
While a jump in oil prices this year has raised concerns about a pass-through to inflation, oil would likely need to rise “well above the levels seen even during the peak of Russia-Ukraine commodity prices to have a meaningful have an impact on core inflation,” said the Bank of That, American strategists say in a report by BofA Global Research.
U.S. benchmark crude rose 21 cents to $85.44 a barrel early Wednesday in electronic trading on the New York Mercantile Exchange. On Tuesday, the stock fell $1.20 to $85.23, pushing year-to-date gains below 20%.
Brent crude, the international standard, rose 22 cents to $89.64 a barrel after falling 96 cents to $89.42 a barrel on Wednesday.
On Wall Street, Apple helped the S&P500 higher by rising 0.7%. It cut its loss for the year to just under 12%.
Norfolk Southern rose 1.3%, although the railroad reported preliminary first-quarter earnings results that fell short of analysts’ expectations.
It agreed to pay $600 million in a class-action lawsuit related to a fiery train derailment in eastern Ohio last year. The company said the agreement, if approved by the court, will resolve all class action claims within 20 miles of the derailment and personal injury claims within 10 miles for those who choose to participate.
Some of the biggest losses on Wall Street came from the same stocks that were the biggest winners in the market frenzy surrounding artificial intelligence technology.
Nvidia fell 2%, and because it is one of the largest stocks on the market, it was the heaviest force weighing on the S.&P500. Super Micro Computer fell 2.6%, though its shares are still up more than threefold year to date.
Tilray Brands fell 20.7% after the cannabis company reported weaker sales growth for the latest quarter than analysts expected.
In foreign exchange, the US dollar rose from 151.75 yen to 151.79 Japanese yen. The euro fell from $1.0857 to $1.0855.