Asian shares dropped Wednesday after Wall Street started 2024 with a slump, giving back some of its powerful gains from last year.
U.S. futures
YM00,
ES00,
were lower and oil prices were little changed.
Hong Kong’s Hang Seng
HK:HSI
lost 1.1%, influenced by a 2% drop in technology shares, and the Shanghai Composite index
CN:SHCOMP
shed 0.1%, with persisting concerns regarding the strength of China’s economic growth adding downward pressure.
Australia’s S&P/ASX 200
AU:XJO
was down 1%. South Korea’s benchmark Kospi
KR:180721
slumped 2% after hovering around a 19-month high Tuesday amid the short-selling ban.
Japanese markets remained closed for the New Year holiday.
On Tuesday Wall Street, the S&P 500
SPX
slipped 0.6% to 4,742.83 after coming into the year at the brink of an all-time high.
The Dow Jones Industrial Average
DJIA
edged up 0.1% to 37,715.04, and the Nasdaq composite
COMP
led the market lower with a drop 1.6% to 14,765.94.
Investors were braced for a pause in the big rally that carried the S&P 500 to nine straight winning weeks and within 0.6% of its record set almost exactly two years ago. That big surge came on hopes the Federal Reserve may have engineered a deft escape from high inflation: one where high interest rates slow the economy enough to cool inflation but not so much that they cause a painful recession.
A report on Tuesday showed that the U.S. manufacturing industry may be weaker than thought. It contracted by more last month than an earlier, preliminary reading indicated, according to S&P Global, as new sales dropped because of weakness both abroad and at home. Business confidence, though, did pick up to a three-month high.
A separate report showed that growth in construction spending slowed by a touch more in November than economists expected.
Like stocks, Treasury yields in the bond market also regressed a bit on Tuesday following their big moves since autumn. The yield on the 10-year Treasury rose to 3.94% from 3.87% late Friday.
In other trading, U.S. benchmark crude oil
CLG24,
gained 1 cent to $70.39 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNH24,
the international standard, lost 4 cents to $75.85 per barrel.
The U.S. dollar
USDJPY,
fell to 141.92 Japanese yen from 141.99 yen.
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