Stocks fell in Tokyo and Hong Kong but rose in other regional markets. US futures trended higher. Oil prices fell.
Japan’s technology investor SoftBank Group Corp. lost more than 4% in trading in Tokyo. On Monday, it reported a record $23 billion quarterly loss. A global swoop in tech-related themes like Chinese e-commerce giant Alibaba weighed on its sprawling investment portfolio.
Analysts monitoring Asian markets said regional tensions also remain a risk due to the flare-up between China and Taiwan following US spokeswoman Nancy Pelosi’s recent visit to Taiwan.
China has said it will expand looming military drills around Taiwan, disrupting shipping and air travel and raising concerns about trade.
“It’s worth keeping an eye on the geopolitical landscape as any major developments on the China/Taiwan front could impact overall risk demand. China has confirmed it will expand military drills around Taiwan, and the military will hold “regular” drills on the east side of the Taiwan Strait midline,” said ActivTrades’ Anderson Alves.
Japan’s benchmark Nikkei 225 fell 0.9% to 27,999.96 in afternoon trade. Australia’s S&P/ASX 200 edged up 0.1% to 7,029.80. South Korea’s Kospi rose 0.5% to 2,504.60. Hong Kong’s Hang Seng erased earlier gains, falling nearly 0.1% to 20,029.60, while the Shanghai Composite was up 0.3% to 3,245.92.
Also of concern are the rising cases of COVID-19 in some Asian countries and its potential impact on supply chains, which are a lifeline for some of the region’s largest manufacturers.
Technology stocks were the biggest drag on Wall Street on Monday. The S&P 500 slipped 0.1% to 4,140.06 and the Nasdaq lost 0.1% to 12,644.46. The Dow Jones Industrial Average closed 0.1% higher at 32,832.54. The Russell 2000 was up 1% to 1,941.21.
The market’s recent swings came as investors braced for a busy week of economic updates that could help answer whether the Federal Reserve’s efforts to cool the economy and quell inflation are working or whether the central bank will continue to aggressively interest rates will raise. Wall Street fears the Fed will hit the brakes too hard and trigger a recession.
The Fed is expected to hike short-term rates by another 0.75 percentage point at its next meeting.
The benchmark S&P 500 index posted three weekly gains in a row.
The US Department of Labor is due to release its July consumer price report on Wednesday, followed by its wholesale price report on Thursday.
This week’s inflation updates follow reports from last week showing that the jobs market remains strong. While that’s good for the economy, it has hampered the Fed’s efforts to cool inflation.
Investors are still reviewing the latest round of corporate earnings, which could also provide more detail on how hard inflation is hitting consumers and businesses.
Clean energy companies gained ground after the Senate approved the Democrats’ big election-year stimulus package that includes funds to fight climate change. First Solar rose 4.7%.
Bond yields fell. The 10-year Treasury yield, which drives interest rates on mortgages and other consumer credit, slipped to 2.76% from 2.83% late Friday.
In energy trading, the US crude index fell 55 cents to $90.21 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the price rose $1.89 to $90.76 a barrel.
Brent crude, the international standard, fell 61 cents to $96.04 a barrel.
In forex trading, the US dollar fell from 134.98 yen to 134.89 Japanese yen. The euro cost $1.0203 and rose from $1.0193.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama