Tag: Stocks and bonds

BANGKOK — Asian shares were mixed Thursday after U.S. stocks fell on worries that what had seemed like a blip in the battle to bring down inflation may be a troubling trend.

Oil prices edged higher and U.S. futures were flat.

South Korean shares were little changed after the ruling conservative party suffered a crushing defeat in a parliamentary election. The Kospi edged less than 0.1% higher, to 2,706.96.

The results were a huge political blow to President Yoon Suk Yeol, and Prime Minster Han Duck-soo and all Yoon’s senior presidential advisers except those in charge of security issues submitted their resignations Thursday.

Elsewhere in Asia, Tokyo’s Nikkei 225 lost 0.4% to 39,442.63 and the Hang Seng in Hong Kong edged 0.1% lower, to 17,118.27.

The Shanghai Composite index gained 0.2% to 3,032.01 and the S&P/ASX 200 fell 0.4% to 7,813.60.

Bangkok’s SET lost 0.3% and Taiwan’s Taiex was down 0.1%.

On Wednesday, the S&P 500 dropped 0.9% to 5,160.64. The Dow Jones Industrial Average dropped 1.1% to 38,461.51, and the Nasdaq composite fell 0.8% to 16,170.36.

Treasury yields leaped as bond prices fell, raising the pressure on the stock market, after a report showed inflation was hotter last month than economists expected. It’s the third straight report to suggest progress on bringing high inflation down may be stalling.

For shoppers, that’s painful because of the potential for even higher prices at the store. For Wall Street, it raises fears that the Federal Reserve will hold back on delivering the cuts to interest rates that traders are craving and have been betting on.

The Fed has been waiting for more evidence to show inflation is heading sustainably down toward its goal of 2%. After an encouraging cooling last year, the fear now is that inflation may be stuck after January’s, February’s and March’s inflation reports all came in hotter than expected, along with data on the economy generally.

Prices for everything from bonds to gold fell immediately after the morning’s release of the inflation data.

The yield on the 10-year Treasury jumped to 4.54% from 4.36% late Tuesday and is back to where it was in November. The two-year yield, which moves more on expectations for Fed action, shot even higher and rose to 4.97% from 4.74%.

Traders sharply cut back on bets that the Fed could begin cutting rates in June. At the start of the year, they were forecasting six or more cuts through 2024.

High interest rates work to undercut inflation by slowing the economy and hurting investment prices. The fear is that rates left too high for too long can cause a recession.

Wall Street’s biggest losers on Wednesday included real-estate investment trusts, utility companies and other stocks that tend to get hurt most by high interest rates.

Real-estate stocks in the S&P 500 fell 4.1% for the biggest loss by far among the 11 sectors that make up the index. That included a 6.1% drop for office owner Boston Properties and a 5.3% tumble for Alexandria Real Estate Equities.

Higher interest rates could chill the housing industry by making mortgages more expensive. Homebuilder D.R. Horton fell 6.4%, Lennar sank 5.8% and PulteGroup dropped 5.2%.

Big U.S. companies are lining up to report profits earned during the first three months of the year, and Delta Air Lines helped kick off the reporting season by delivering better-than-expected results.

The airline said it’s seeing strong demand for flights around the world, and it expects the strength to continue through the spring. But it also refrained from raising its profit forecast for the full year. Its stock climbed as much as 4% during the morning before flipping to a loss of 2.3%.

In other trading early Thursday, U.S. benchmark crude oil was unchanged at $86.21 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, added 2 cents to $90.50 per barrel.

The U.S. dollar fell to 153.10 Japanese yen from 153.17 yen, trading near a 34-year high. The yen has weakened on expectations that the gap between interest rates in Japan, which are near zero, and those in the U.S. will remain wide for the foreseeable future.

The euro fell to $1.0734 from $1.0746.

NEW YORK — U.S. stocks are hanging near their records Monday at the start of a week with several influential economic reports.

The S&P 500 was 0.1% higher in early trading, coming off an all-time high and its latest winning month in a romp higher that began in late October. The Dow Jones Industrial Average was down 23 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.

Miner Newmont rose 2.8% for one of the bigger gains in the S&P 500 as the price of gold continues to set records. The metal was up 1.8% at $2,278.90 per ounce.

AT&T fell 2.4% after saying over the weekend that sensitive information for millions of its current and former customers was recently found on the “dark web.”

In the bond market, Treasury yields ticked higher in their first trading since a report on Friday showed inflation is behaving as expected, at least by the measure that the Federal Reserve prefers to use. Both the U.S. bond and stock markets were closed on Friday.

The inflation data kept alive hopes that the Federal Reserve can start cutting its main interest rate in June. The Fed has hiked that rate to its highest level since 2001 in order to slow the economy and hurt investment prices enough to get inflation under control.

Expectations for coming cuts to rates have been a major reason the S&P 500 soared more than 20% from October through March. So too have been a cavalcade of reports showing the U.S. economy remains remarkably solid despite high interest rates.

This week will offer more updates on the job market and key areas of the economy, including data on the U.S. manufacturing industry, job openings across the country and the strength of U.S. services businesses. The headliner arrives on Friday, when economists expect a report to show that hiring cooled a bit last month.

A bit of a slowdown would be welcome on Wall Street, where the hope is that the economy remains solid but doesn’t get so strong that it puts upward pressure on inflation. Inflation is lower than it was at its peak nearly two years ago. But progress has become a bit bumpier this year, as several reports have come in hotter than expected.

Fed Chair Jerome Powell said again on Friday that the central bank is waiting to get “more good inflation readings” before cutting interest rates this year. It’s been sticking with an outlook for three cuts to rates in 2024. Wall Street traders have come around to that as well, after earlier forecasting even more cuts this year.

In the bond market, the yield on the 10-year Treasury rose to 4.27% from 4.21% late Thursday. The two-year yield, which more closely tracks expectations for the Fed, ticked up to 4.64% from 4.63%.

In stock markets abroad, Tokyo’s Nikkei 225 fell 1.4% after a Bank of Japan quarterly survey on business conditions showed sentiment among large manufacturers declined for the first time in a year.

In China, stocks gained 1.2% in Shanghai after surveys suggested the country’s manufacturing industry is strengthening.

In Europe, stock markets were closed for a holiday.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Stocks fell on Wall Street Friday and are on track for a mixed finish in a week that was heavy with reports showing that inflation, though broadly cooling, remains stubborn.

The S&P 500 fell 0.7% and is on track for a slight loss this week. The index set a record high on Tuesday, but has been mostly wavering since.

The Dow Jones Industrial Average fell 223 points, or 0.6% as of 1:22 p.m., and the Nasdaq composite fell 1%.

Technology stocks were the biggest weights sinking the market. Software maker Adobe slumped 13.9% after giving investors a weak revenue forecast.

A closely-watched report from the University of Michigan showed that consumer sentiment unexpectedly fell in March. Consumers became slightly less optimistic about the economy, but continue to expect inflation to come down further, a potential sign that consumer prices will come under control.

Inflation remains the big concern for Wall Street amid hopes for the Federal Reserve to start cutting interest rates. The Fed sharply raised interest rates starting in 2022 in an effort to tame inflation back to its 2% target. Inflation at the consumer level was as high as 9.1% in 2022.

A report on consumer prices this week showed inflation remains stubborn, ticking up to 3.2% in February from 3.1% in January. Another report on prices at the wholesale level also showed inflation remains hotter than Wall Street expected.

Other reports this week showed some softening in the economy, which bolstered hopes for a continued long-term easing of inflation.

A rally for stocks that started in October has essentially stalled in March as investors try to determine the path ahead for inflation, the Fed and the economy.

“You can kind of look in either direction and find a find a reason to be concerned about equities,” said Brian Nick, senior investment strategist at The Macro Institute.

Investors still have to worry about the lagging impact on the economy from the Fed’s historic rate hikes, he said. The broader economy remains strong, but it is showing signs of slowing and that could mean a recession is still possible.

“Things happen more slowly than investors have come to process,” he said. “Policy lag exerting a downward pull is a lot longer than what investors have priced in.”

Fed officials will give their latest forecasts for where they see interest rates heading this year on Wednesday, following their latest policy meeting. Traders are still leaning toward a rate cut in June, according to data from CME Group. The central bank has previously signaled that it expects three rate cuts in 2024. Lower rates would relieve pressure on the economy and financial system.

Bond yields edged higher. The yield on the 10-year Treasury rose to 4.31% from 4.29% late Thursday. The yield on the 2-year Treasury, rose 4.72% from 4.69%.

Weak financial forecasts weighed down several companies. Beauty products retailer Ulta Beauty fell 4.6% after giving investors a disappointing earnings forecast for the year. Electronics maker Jabil slumped 16.5% after trimming its revenue forecast for the year.

Markets in Europe were mixed, while markets in Asia slipped.

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AP Business Writers Elaine Kurtenbach and Matt Ott, and AP Economics Writer Christopher Rugaber, contributed to this report.