Asian stocks fell on Wednesday as markets digested Japanese and Australian corporate figures. US stocks, on the other hand, were relatively stable as the earnings season for major companies got underway.
US futures fell as oil prices rose.
Japan’s benchmark Nikkei 225 fell 1.1% to 39,154.85, while the Japanese yen traded at its highest level in months ahead of a policy decision by the Bank of Japan next week.
The U.S. dollar traded above 162 yen earlier this month, but the Japanese currency has strengthened in recent days as officials intervened to halt the yen’s slide. Expectations that the BOJ could raise interest rates from near zero and that the Federal Reserve could cut rates in turn have supported the yen, which has languished as the gap between U.S. and Japanese interest rates widens.
The dollar was trading at 154.68 yen on Wednesday, down from 155.59 yen on Tuesday evening.
A business survey released on Wednesday showed that Japan’s factory activity contracted in July as weak demand weighed on the manufacturing sector. Services were on the rise, helping to boost growth in overall Japanese private sector activity.
Elsewhere in Asia, Hong Kong’s Hang Seng lost 1.1% to 17,320.49, led by the Hang Seng Tech Index, which fell 1.6%. The Shanghai Composite lost 0.5% to 2,901.95.
Australia’s S&P/ASX 200 fell 0.1% to 7,963.70 after the services sector posted weaker growth in July. Manufacturing improved slightly but remained in contraction territory.
South Korea’s Kospi fell 0.6% to 2,758.71, while heavyweight Samsung Electronics fell 2.2% after talks between the company and its main union ended without an agreement. Earlier this month, workers declared an indefinite layoff strike to pressure the company to accept their requests for higher salaries and other benefits.
On Tuesday is the S&The P 500 fell 0.2% to 5,555.74. The Dow Jones Industrial Average fell 0.1% to 40,358.09 and the Nasdaq Composite fell 0.1% to 17,997.35.
But the smaller stocks in the Russell 2000 continued their big run, rising 1%. They have recently turned around in the market’s rankings, soaring amid hopes of coming rate cuts.
The mixed trade came into being when dozens of businesses reported their results for springheadlined by Alphabet and Tesla after trading closed for the day. Expectations are high, with analysts predicting the strongest earnings growth for S&According to FactSet, these are P 500 companies as of late 2021.
UPS was one of the heaviest weights on the S&P500, falling 12.1% after spring profit and sales came in lower than analysts had expected.
But CEO Carol Tomé said the company’s U.S. arm delivered more packages than a year earlier, first such growth in nine quarters and called it a “significant turning point for our business.”
Nvidia was the stock that pushed the S down the most&P 500. The 0.8% loss for the day was relatively modest, but the S&P500 gives more weight to larger stocks, and Nvidia is worth more than $3 trillion.
That’s despite the fact that high mortgage rates have cooled the housing market. A report on Tuesday showed sales of previously occupied homes weaken in June, even more than economists had expected. Sales slowed in part because prices for previously occupied homes are at an all-time high, according to the National Association of Realtors.
Easier times may be ahead for interest rates. With inflation slowing, the Federal Reserve is widely expected to begin cutting key interest rates in September. That would provide some relief for both the economy and financial markets after the Fed kept the federal funds rate at its highest level in more than two decades.
In other trading, benchmark U.S. crude rose 40 cents to $77.36 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 39 cents to $81.40 a barrel.
The euro fell from $1.0855 to $1.0848.