HONG KONG — Asian shares fell on Wednesday, with most markets in the region closed for a holiday. Meanwhile, US stocks ended their worst month since September.
Oil prices were lower and US futures were mixed.
Tokyo’s Nikkei 225 index lost 0.4% to 38,271.77 after factory activity suffered a milder contraction in April, while au Jibun Bank’s manufacturing purchasing managers’ index rose to 49 from 48.2 in March. 6 in April. A PMI reading below 50 indicates a contraction, and a reading of 50 indicates no change.
The yen continues to struggle. On Wednesday, the US dollar rose from 157.74 yen to 157.88 Japanese yen.
The Australian S&The P/ASX 200 fell 1.1% to 7,581.90. Other markets in the region were closed for the Labor Day holiday.
On Tuesday the S&The P500 fell 1.6%, confirming its first losing month in the past six months, ending at 5,035.69. Momentum reversed in April, dropping as much as 5.5% at one point after setting a record at the end of March.
The Dow Jones Industrial Average fell 1.5% to 37,815.92, and the Nasdaq composite lost 2% to 15,657.82.
Stocks began falling as soon as trading began after a report showed that U.S. workers posted bigger-than-expected gains in wages and benefits in the first three months of the year. While that is good news for workers and the latest sign of a robust labor market, it fuels concerns that upward pressure on inflation will continue.
It followed a series of reports this year showing that inflation remains stubbornly high. That has led traders to largely give up hope that the Federal Reserve will make multiple interest rate cuts this year. And that, in turn, has caused government bond yields to rise in the bond market, increasing pressure on equities.
Tuesday’s stock losses accelerated late in the day, as traders made their final moves before closing the books on April, and ahead of an announcement by the Federal Reserve on interest rates scheduled for Wednesday afternoon.
No one expects the Federal Reserve to change its key interest rate at this meeting. But traders are concerned about what Fed Chairman Jerome Powell will say about the rest of the year.
GE Healthcare Technologies fell 14.3% after reporting weaker results and revenue for the latest quarter than analysts expected. F5 fell 9.2% despite better-than-expected earnings.
McDonald’s fell 0.2% after its last quarter profit fell just short of analyst expectations. The company was hit by weakening sales trends at its franchise stores abroad, partly due to boycotts of Muslim-majority markets over the company’s perceived support for Israel.
Helping to keep market losses in check was 3M, which rose 4.7% after stronger-than-expected results and sales. Eli Lilly climbed 6% after posting better-than-expected profits on strong sales of its Mounjaro and Zepbound diabetes and obesity drugs. The company also raised its full-year revenue and profit expectations.
Stocks of cannabis companies also soared after The Associated Press reported that the U.S. Drug Enforcement Administration will take steps to reclassify marijuana as a less dangerous drug, in a historic shift. Cannabis producer Tilray Brands rose 39.5%.
The earnings reporting season so far has been largely better than expected. Not only the technology companies that dominate Wall Street have done well, but also companies across a range of sectors.
On the bond market, the yield on the 10-year government bond rose from 4.61% to 4.69% on Wednesday.
Benchmark U.S. crude fell 75 cents to $81.18 a barrel. Brent crude, the international standard, lost 65 cents to $85.68 a barrel.
In currency trading, the euro cost $1.0655, down from $1.0663.