BANGKOK — Equities slid in Asia on Wednesday after another broad decline on Wall Street, as markets continue to be gripped by inflation uncertainty, rising interest rates, and the potential for a recession.
US futures moved higher while oil prices fell.
A weaker-than-expected reading of consumer confidence in the US pointed to deteriorating consumer expectations due to continued high inflation.
That “dragged stocks down as sentiment for risky assets soured,” ActivTrades’ Anderson Alves commented.
He said investors are awaiting comment from Federal Reserve Chairman Jerome Powell and other leading central bankers later in the day.
Tokyo’s Nikkei 225 index lost 1% to 26,769.52, while Seoul’s Kospi fell 1.4% to 2,386.88. The Shanghai Composite Index fell 0.8% to 3,383.05 points. Hong Kong’s Hang Seng fell 1.6% to 22,053.86.
The Australian S&P/ASX 200 lost 1.1% to 6,692.50 points. Bangkok and India also fell.
On Tuesday, the S&P 500 ended 2% lower at 3,821.55, while the Dow fell 1.6% to 30,946.99. The tech-heavy Nasdaq fell 3% to 11,181.54.
The Russell 2000 lost 1.9% to 1,738.84. The indices are all on track for 6% or more losses in June.
About 85% of the stocks in the benchmark S&P 500 closed in the red. Technology, communications, and healthcare stocks accounted for much of the decline. Retailers and other companies relying on direct consumer spending also helped lower the index. Energy stocks, the only sector in the index to record gains this year, rose as the price of crude oil rose.
The Conference Board reported that the consumer confidence index fell to its lowest level in more than a year in June, much weaker results than economists had expected.
Investors face a ubiquitous list of concerns about rising inflation that puts pressure on businesses and consumers. Supply chain problems that have fueled soaring inflation have been exacerbated in recent months by heightened restrictions in China related to COVID-19.
Companies have increased prices for everything from food to clothing. In February, the Russian invasion of Ukraine put further pressure on consumers by raising energy prices and pumping gasoline prices to record highs.
Consumers were already shifting spending from goods to services as the economy recovered from the impact of the pandemic. Still, the increased pressures from inflation have led to a sharper shift from discretionary items like electronics to necessities.
Central banks are raising rates to temper inflation after years of keeping interest rates low to boost economic growth. Still, investors fear they could go too far and effectively push economies into recession.
Investors await comments expected before midweek from central bank leaders, including Fed Chair Jerome Powell and the head of the European Central Bank, Christine Lagarde. They will also receive another update on US economic growth on Wednesday when the Commerce Department releases a report on gross domestic product for the first quarter.
Wall Street is also gearing up for its latest round of corporate earnings in the coming weeks, which will help paint a clearer picture of how companies are coping with rising costs and consumers cutting back on spending.
Athletic shoe and apparel giant Nike fell 7% after giving investors a tentative update on the potential drop in sales due to lockdowns in China. According to FactSet, the company relies on China for about 17% of its revenue.
Wynn Resorts increased by 3.2% and Las Vegas Sands by 4%. The companies, which have major gambling companies in China, got a boost after China eased the quarantine requirement for people from abroad.
Technology and communications companies were among the biggest losers on Tuesday. Microsoft fell 3.2%, and Apple fell 3%. The parent Google alphabet is down 3.3%.
Energy stocks posted solid gains as the price of crude oil in the US rose 2%.
In other trading Wednesdays:
The yield on the 10-year Treasury, which helps determine mortgage rates, fell from 3.19% to 3.17%.
US benchmark crude fell 54 cents to $111.22 a barrel in electronic New York Mercantile Exchange trading.
Brent oil lost 62 cents to $113.18 a barrel.
The dollar fell to 136.03 Japanese yen from 136.12 yen on Tuesday. The euro weakened to $1.0509 from $1.0522.
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AP Business Writers Damian J. Troise and Alex Veiga contributed.
