Asian shares fell on Tuesday following a report showing U.S. manufacturing contracted in May, signaling a slowing economy. Oil prices dropped, while U.S. futures saw a slight increase. The Nikkei 225 in Japan and Kospi in Seoul both declined, while Hong Kong’s Hang Seng gained slightly. The Shanghai Composite and Australia’s S&P/ASX 200 also saw losses, while Taiwan’s Taiex dropped by 0.7%. In the U.S., the S&P 500 edged higher, the Dow Jones Industrial Average fell, and the Nasdaq composite rose. Treasury yields also slid after the report on U.S. manufacturing.
Analysts questioned the significance of the report on U.S. manufacturing, which has been in decline for most of the past two years. Some suggest that the pessimism may be a result of profit-taking or deeper concerns about the economy. The yield on the 10-year Treasury fell, and more economic reports are expected to impact yields in the coming days, including data on job openings and growth in jobs and wages. Stocks of companies tied to the economy’s strength, such as the oil-and-gas industry, saw losses as crude prices fell on concerns about weaker demand growth.
Some big technology stocks performed well despite economic concerns, with Nvidia climbing significantly after unveiling new products and services. GameStop also saw a significant increase in its stock price, reminiscent of its 2021 rally, after a Reddit account disclosed a sizable stake in the company. Other meme stocks, whose prices are driven by smaller investors’ enthusiasm rather than business prospects, also saw gains. In other news, U.S. benchmark crude oil prices decreased, while the U.S. dollar rose against the Japanese yen and the euro.
Overall, Asian shares fell in response to the report on U.S. manufacturing contracting in May, indicating a slowing economy. Stocks tied to the economy’s strength saw losses, while big technology stocks and meme stocks experienced gains. Treasury yields also slid, and more economic reports are expected to impact yields in the coming days. Oil prices fell, and the U.S. dollar strengthened against major currencies. Despite the mixed performance of global markets, investors remain cautious amid concerns about the economy’s trajectory.
