Asian stocks were mixed on Tuesday as investors brace for a busy week of economic reports and a Federal Reserve policy meeting. Japan’s Nikkei 225 index rose 0.3% due to an upward revision of economic data and weakness in the yen. The Bank of Japan is also set to announce the outcome of its meeting, with expectations of rate hikes later this year. Meanwhile, Hong Kong’s Hang Seng and Shanghai Composite both saw losses, with markets cautious ahead of a report on inflation in China.
In Australia, the S&P/ASX 200 slipped 1.6%, while South Korea’s Kospi was up 0.4%. On Wall Street, the S&P 500 and Nasdaq composite hit record highs on Monday, with the Dow Jones Industrial Average also gaining. Data on the economy has been mixed, leading to uncertainty among traders. A slowdown in the economy could lessen inflation pressure and potentially prompt the Federal Reserve to cut interest rates. However, recent reports have been conflicting, with strong job numbers following weaker reports on manufacturing and consumer spending.
Companies in the AI sector, such as Nvidia, continue to report growth despite economic uncertainties. Nvidia’s stock split made its share price more affordable, leading to a 0.7% increase on Monday. Treasury yields were mixed ahead of reports on inflation levels, with the Federal Reserve set to announce its decision on interest rates. Expectations are low for a rate movement, but policymakers will release forecasts for future interest rates and economic direction. Traders are betting on one or two rate cuts in 2024, down from earlier projections of three cuts.
In the bond market, the yield on the 10-year Treasury rose slightly, while the two-year yield slipped. Oil prices also saw a decline, with U.S. benchmark crude falling to $77.60 per barrel. The international standard Brent crude was down to $81.44 per barrel. The U.S. dollar gained against the Japanese yen and euro. Overall, markets are watching economic data closely, with expectations of potential rate hikes and shifts in monetary policy based on the outcomes of the week’s reports and Fed meeting.
