Asian stocks mostly slipped on Wednesday after Wall Street’s record-breaking run took a breather, with U.S. Federal Reserve Chair Jerome Powell cautioning that stock prices are “fairly highly valued.”
Japan’s Nikkei 225 fell 0.4% to 45,300.30 in morning trade, while Australia’s S&P/ASX 200 dropped 1.0% to 8,756.30 and South Korea’s Kospi slid 1.1% to 3,448.44. In contrast, Hong Kong’s Hang Seng gained 0.6% to 26,305.02, and the Shanghai Composite edged up 0.2% to 3,829.91.
On Wall Street, the S&P 500 lost 0.6%, the Dow Jones Industrial Average shed 88 points, or 0.2%, and the Nasdaq composite sank 0.9%. The decline ended a three-day streak of record highs for all three indexes.
Markets have surged since April, but some analysts warn stocks may have climbed too quickly and become overpriced. Powell noted that the Fed faces a tricky situation, with job market concerns rising even as inflation remains above the 2% target. His remarks were the first since the central bank cut its benchmark interest rate last week.
“Essentially the Fed Chairman confirmed what we already knew — that the central bank remains between a rock and a hard place in managing inflation risks and a weakening job market,” said Tim Waterer, chief market analyst at KCM Trade.
The Fed has signaled more rate cuts later this year and into next, but policymakers remain cautious as lower rates could fuel inflation further. Investors are now waiting for Friday’s U.S. inflation report, expected to show a slight pickup in consumer prices.
Wall Street futures dip after record-high streak, eyes on Fed
Technology stocks weighed heavily on Wall Street. Nvidia dropped 2.8% after pulling back from gains made on news of a partnership with OpenAI. Amazon slid 3%, while Microsoft lost 1%.
The S&P 500 closed at 6,656.92, down 36.83 points. The Dow Jones fell 88.76 points to 46,292.78, and the Nasdaq tumbled 215.50 points to 22,573.47.
In the bond market, the yield on the 10-year U.S. Treasury slipped to 4.11% from 4.15% a day earlier.
Oil prices edged higher, with U.S. benchmark crude rising 14 cents to $63.55 a barrel and Brent crude up 13 cents at $67.76. In currency trading, the dollar strengthened to 147.77 Japanese yen from 147.56 yen, while the euro fell to $1.1801 from $1.1818.
Source: Agency