Equities in Asia were mixed on Thursday after a shaky trading day produced modest gains on Wall Street.
US futures just changed as oil prices fell.
The Chinese central bank left the benchmark lending rate unchanged. While other large economies are raising rates to cool inflation, the Chinese economy has slowed and price increases have been moderate.
The Shanghai Composite Index lost 1.2% to 3,199.24, while Hong Kong’s Hang Seng Index rose 0.3% to 18,904.42.
Tokyo’s Nikkei 225 Index gained 0.2% to 27,875.91. Japan posted a record trade deficit for the month of August, driven by high costs for imports of energy and other commodities and a weak yen.
But analysts said they expect a rebalancing in the coming months.
“Motor vehicle production is expected to continue to normalize as supply chain disruptions ease, while commodity price growth has further declined,” Capital Economics’ Darren Tay said in a comment.
Seoul’s Kospi lost 0.4% to 2,401.83, while Australia’s S & P / ASX 200 gained 0.2% to 6,842.90.
Trading was shaky in New York on Wednesday, a day after the market’s worst decline in two years was triggered by fears that higher interest rates could cause a recession.
A report on wholesale inflation showed that prices are still rising rapidly, with pressures rising below the surface, even as headline inflation has slowed. Tuesday echoed a report on consumer-level inflation, which raised expectations of interest rate hikes and triggered a rout for the markets.
The S&P 500 gained 0.3% to 3,946.01, while the Dow was up 0.1% to 31,135.09. The Nasdaq gained 0.7% to 11,719.68 and the Russell 2000 gained 0.4% to close at 1,838.46.
Traders now see a one in four chance that the Fed could raise its benchmark rate by a full percentage point next week, quadrupling the usual move, according to the CME group. The day before, it was closer to a one in three chance. The site puts the likelihood of a three-quarter percentage point increase now at 76%, up from 69% on Tuesday.
The central bank has already raised the benchmark interest rate four times this year, with the last two increases of three-quarters of a percentage point.
The Fed is taking aggressive action on interest rates to try to cool the hottest inflation of the past four decades. Tuesday’s high price report shook the market with signs that inflation is entering a more stubborn phase that may require an already determined Fed to become more aggressive.
Wall Street is particularly concerned that rate hikes may go too far in slowing the economy and sending it into recession. The Fed is trying to avoid this finding, but the latest inflation reports suggest it is becoming a more difficult task.
The US economy in general is slowing, but consumers have remained resilient and the job market remains strong. Wall Street will receive another update on the latest impact of inflation on spending when the government releases its retail sales report for August on Thursday.
The market is also monitoring US-China tensions and the war in Ukraine, as government and business officials are bracing for the possibility of a nationwide rail strike later this week that could cripple a chain of supply already upset.
The railways have already begun to reduce shipments of hazardous materials and have announced plans to stop transporting refrigerated products before Friday’s strike expires. Companies that rely on Norfolk Southern, Union Pacific, BNSF, CSX, Kansas City Southern, and other railways to deliver their raw materials and finished products are planning for the worst.
Union Pacific fell 3.7% and Norfolk Southern 2.2%.
Biden administration officials are rushing to develop a plan to keep goods moving if the railways shut down. The White House is also pressuring the two sides to resolve their differences, and a growing number of business groups are pressuring Congress to be prepared to step in and block a strike if they fail to reach an agreement.
In other trading on Thursday, US benchmark crude oil remained unchanged at $ 88.48 a barrel in e-commerce on the New York Mercantile Exchange. It jumped to $ 1.17 on Wednesday.
Brent crude, the price base for international trade, slipped 24 cents to $ 93.86 a barrel.
The dollar rose to 143.69 Japanese yen from 143.16 yen late Wednesday. The euro weakened to 99.63 cents from 99.77 cents.
© Copyright 2022 Associated Press. All rights reserved. This material may not be published, transmitted, rewritten or redistributed without permission.