By YURI KAGEYAMA
AP Business Writer
TOKYO (AP) — Global stocks fell Wednesday as investors awaited the next report on US inflation, an important indicator of where interest rates and global growth could go in the coming months.
France’s CAC 40 lost 0.2% in early trading at 7,382.48. Germany’s DAX fell 0.3% to 15,914.55. Britain’s FTSE 100 fell 0.2% to 7,752.65. US stocks were set to fall with Dow futures down 0.1% at 33,599.00. S&P 500 futures fell 0.1% to 4,128.25.
Japan’s benchmark Nikkei 225 index lost 0.4% to end at 29,122.18. Australia’s S&P/ASX 200 was down 0.1% at 7,255.70. South Korea’s Kospi fell 0.5% to 2,496.51. Hong Kong’s Hang Seng fell 0.5% to 19,762.20, while the Shanghai Composite lost 1.2% to 3,319.15.
Market watchers are also worried about any signs of economic trouble in China after recent data showed imports were lagging behind. even as exports continued to growalbeit at a slower pace than before.
The focus remains on what the US Federal Reserve might do about interest rates. Although the general consensus is that the rallies are over for now, that view could change quickly.
“Market reaction is expected to be skewed in the event of data loss, as the Fed has indicated that it is prepared to raise interest rates again if necessary,” said Anderson Alves of ActivTrades.
So far in the earnings season, which is nearing its final stretch, most companies have been beating first-quarter earnings forecasts. That’s largely because expectations were set quite low due to the slowing economy and high interest rates. Companies in the S&P 500 are still on track to report a second straight quarter of earnings that are weaker than year-ago levels.
“Companies have done quite well,” said Margie Patel, a senior portfolio manager at Allspring Global Investments.
The better-than-feared results have given Wall Street some support, even as many other concerns weigh on him.
Key among them is what will happen to the US banking system, which is under stress after three high-profile bank failures since March. Affected by much higher interest rates, small and medium-sized banks are struggling to reassure everyone that their deposits are stable and that they are not at risk of a sudden exodus of clients.
The next big milestone for the market will be Wednesday’s consumer inflation report. Inflation is down from its peak last summer, but it remains stubbornly high. That created uncertainty about what the Federal Reserve’s next move will be.
The central bank has already raised its benchmark interest rates to a range of 5% to 5.25%, from near zero at the start of 2022. High rates can undermine inflation, but only by stifling the economy and hurting commodity prices. blunt investment.
Many investors are bracing for a recession later this year due to much higher rates, as well as the potential for banks to withdraw the loans due to industry problems. Although the labor market has remained resilient and the unemployment rate is remarkably low, other areas of the economy, such as manufacturing, have shown more weakness.
In energy trading, benchmark US crude lost $1.09 to $72.62 a barrel. Brent crude, the international standard, fell $1.15 to $76.29 a barrel.
In currency trading, the US dollar rose to 135.25 Japanese yen from 135.18 yen. The euro cost $1.0957, gradually coming down from $1.0967.
AP business writer Stan Choe contributed from New York.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama