TOKYO (AP) — Asian stocks were down on Tuesday as concerns about inflation tempered optimism over President Joe Biden’s remark that he was considering cutting U.S. tariffs on Chinese imports.
Benchmarks fell in Japan, Australia, South Korea and China, although some of the indexes were higher earlier in the day. Oil prices were lower.
Biden, who announced a new economic and trade initiative with the region during a visit to Japan, confirmed to reporters that he planned to discuss the issue of punitive tariffs imposed on China under the administration of the former President Donald Trump with Treasury Secretary Janet Yellen once back. in Washington.
“I speak with the secretary when I get home. We are thinking about it,” Biden said.
The comments sparked optimism about the potential to ease tensions between the world’s two largest economies, but not all were convinced.
“Discussions of reducing tariffs on Chinese exports have already surfaced and the lack of concrete follow-up remains an element of disappointment for the markets,” said Yeap Jun Rong, market strategist at IG in Singapore.
Investors are watching the impact of the war in Ukraine on commodity prices and the possible hit to global economic growth from pandemic shutdowns in China.
Japan’s benchmark Nikkei 225 was down 0.8% in afternoon trade to 26,793.94. Australia’s S&P/ASX 200 was little changed, falling less than 0.1% to 7,144.30, after fluctuating throughout the day. The South Korean Kospi fell 1.1% to 2,617.38. Hong Kong’s Hang Seng fell 1.7% to 20,125.87, while the Shanghai Composite fell 1.2% to 3,109.39.
“Russia’s invasion of Ukraine, a wave of COVID-19 infections and lockdowns in mainland China, relentless inflation and tighter financial conditions have disrupted production and stifled demand, causing global economy,” said Sara Johnson, chief executive of S&P. Global market intelligence.
Wall Street had an upbeat start to the week after seven weeks of declines that nearly ended the bull market that began in March 2020. The S&P 500 rose 1.9% to 3,973.75, tech stocks and financial doing much of the heavy lifting for the benchmark. The Dow Jones Industrial Average rose 2% to 31,880.24 and the Nasdaq climbed 1.6% to 11,535.27.
Small business stocks staged a rally. The Russell 2000 gained 1.1% to 1,792.76.
The recent selloff has prompted traders to buy big tech stocks and shares of other companies that had performed well before the market’s punishing skid, said Quincy Krosby, chief equity strategist for LPL Financial.
“What we’re seeing today are traders and investors coming in and taking advantage of the lower (price) levels,” she said. “It’s a tussle in the market between those who say the market has become attractive, and those who say ‘not really’, because that doesn’t take into account much slower growth.”
Ongoing inflation concerns weighed on the market and kept major indices in a doldrums. The benchmark S&P 500 just had its longest weekly losing streak since the dotcom bubble burst in 2001. It nearly fell 20% from its peak at the start of the year, which would place the index at the heart of most workers’ 401(s). (k) accounts in a bear market.
A string of disappointing earnings reports from major retailers last week also raised concerns that consumers are tempering spending on a wide range of goods as they are pressured by rising inflation.
Investors fear that the central bank will go too far in raising rates or act too quickly. This could slow business activity and potentially trigger a recession. On Wednesday, investors will get a more detailed look at the Fed’s decision-making process with the release of minutes from the latest policy-setting meeting.
Wall Street will also receive some economic updates this week from the Commerce Department. On Thursday it will release a first-quarter gross domestic product report and on Friday it will release personal income and spending data for April.
In energy trading, benchmark U.S. crude fell 73 cents to $109.56 a barrel in electronic trading on the New York Mercantile Exchange. It added 1 cent to $110.29 a barrel on Monday. Brent crude, the international price standard, fell 78 cents to $112.64 a barrel.
In currency trading, the US dollar fell slightly to 127.61 Japanese yen from 127.78 yen. The euro traded at $1.0669, down from $1.0688.
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AP Business Writers Damian J. Troise and Alex Veiga contributed.
