Stocks fell broadly on Wall Street Friday, sending the S&P 500 to its worst weekly loss since February. The index fell 1.3% and gave back 1.9% over the course of the week. Banks and other stocks that soared earlier this year on expectations for the economy and inflation were among the biggest losers. Investors are still recalibrating their moves after the Federal Reserve’s signal this week that it may raise rates sooner than expected. Short-term Treasury yields continued to spurt higher, and the Dow Jones Industrial Average had its worst weekly loss since last October.
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Asian shares are mostly higher as investors continue to digest the latest message from the U.S. Federal Reserve on raising short-term interest rates by late 2023. Benchmarks in Japan, South Korea, Australia and Hong Kong rose, while the Shanghai index fell. Investors are watching for what the Bank of Japan may say about its monetary policy, although dramatic change isn’t expected. Most stocks ended lower on Wall Street. Any easing up on the Fed’s aid for the economy would be a big change for markets, which have feasted on easy conditions after the central bank slashed short-term rates to zero and brought in other emergency programs.
Asian stock markets have followed Wall Street lower after the Federal Reserve indicated it might ease off economic stimulus earlier than previously thought. Tokyo, Hong Kong and Seoul fell while Shanghai gained after Fed policymakers, who previously forecast no interest rate hikes before 2024, estimated their benchmark rate would be raised twice by late 2023. The Fed indicated it sees the U.S. economy improving faster than expected. On Wall Street, the benchmark S&P 500 index fell 0.5% overnight after Fed projections showed some board members expect short-term interest rates to rise by half a percentage point by late 2023. Ultra-low rates have propelled a global stock market rebound from last year’s plunge amid the coronavirus pandemic.
The White House believes it has an ally in the bond markets to make the case that inflation isn’t an economic threat. Republican lawmakers have interpreted a jump in consumer and producer prices as a sign that inflation is spiking at levels that will hurt growth. But the financial markets appear to be backing President Joe Biden’s case that any price increases are the fleeting result of the United States restarting after the lockdowns caused by the coronavirus pandemic. The White House points to two key market-based measures of inflation that show no cause for alarm in the medium to long term.
Asian shares are mixed in quiet trading ahead of a U.S. Federal Reserve meeting that may yield clues on what lies ahead with its massive support for markets. Japan's benchmark Nikkei 225 fell in early trading, but those in Australia and South Korea rose. Shares slipped in Hong Kong but inched up in Shanghai. Japan released data showing its trade surplus jumped 49.6% in May from a year earlier, but analysts said that was smaller than expected. Investors are also watching for data out of China on industrial production and retail sales. Indexes finished lower on Wall Street.
DUBLIN--(BUSINESS WIRE)--Jun 15, 2021--