Asian stocks mixed in light ‘Golden Week’ trading

NEW YORK (AP) — Stocks swing between small gains and losses early on Wall Street Tuesday as investors await Wednesday’s decision from the Federal Reserve on interest rates. The Fed is expected to raise its benchmark rate by twice the usual amount this week as it steps up its fight against inflation, which is at its highest level in four decades. The S&P 500 was barely in the red after the first few minutes of trading Tuesday, as was the Dow Jones Industrial Average. Tech stocks were weaker early on after rebounding late Monday. The Nasdaq fell 0.3%.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK (AP) — U.S. markets fell before the opening bell on Tuesday ahead of the release of the Federal Reserve’s decision this week on interest rates.

Futures on Dow Jones Industrials and the S&P 500 both fell 0.2% less than two hours before markets opened.

Investors expect another rate hike by the US Federal Reserve this week as it and other central banks step up efforts to rein in inflation that has been high for four decades. The central bank is expected to raise short-term interest rates to double the usual level on Wednesday. It has already raised its key overnight rate once, for the first time since 2018, and Wall Street expects several big hikes in the coming months.

It will make borrowing more expensive – for a car, a house, a credit card purchase, and could chill a burning economy. It would also weigh on high-flying equity markets as investors shift money to other assets as yields rise. Ultra-low interest rates have helped push stocks to all-time highs during the pandemic.

Benchmarks rose in Hong Kong, Paris and Frankfurt but fell in Sydney and London. Trading was light, with markets in mainland China, Japan and some other countries closed for the holidays.

Australia’s central bank raised its benchmark interest rate to 0.35% from 0.1%, the first such hike since 2010. The Fed is expected to announce a rate hike on Wednesday as it and others central banks are fighting inflation which is hovering at 40-year highs.

Australia’s S&P/ASX 200 fell 0.5% to 7,307.50 on Tuesday.

In European midday trading, the German DAX rose 0.2% while the CAC 40 in Paris rose 0.3%. Britain’s FTSE 100 fell 0.7%.

In Asia, the Hong Kong Hang Seng edged up 0.1% to 21,101.89. The index had rallied earlier in the day on hopes of further relaxation of coronavirus prevention rules. But he failed to hold on to those gains. The government reported that the territory’s economy contracted by 4% in annual terms in the first quarter of the year.

In South Korea, the Kospi fell 0.3% to 2,680.46. Shares also fell in Taiwan and Thailand.

On Monday, a late afternoon reversal led by tech stocks left major indexes slightly higher on Wall Street, avoiding more losses after a brutal April when a tech selloff dragged major benchmarks down.

Concerns about rising inflation are weighing on the latest set of corporate results. This week brings more, with CVS Health reporting results on Wednesday and Kellogg on Thursday. Pfizer reported strong first-quarter sales and earnings on Tuesday but revised its outlook for the full year down, sending its shares tumbling 1.3% before the opening bell.

The 10-year Treasury yield was 2.96% after hitting 3.00% on Monday. It had not exceeded 3% since December 3, 2018, according to Tradeweb.

Higher yields make bonds increasingly attractive assets relative to riskier and more expensive stocks, especially those in technology and other growth-oriented companies.

European energy ministers were meeting in Brussels to discuss Russian supply problems and sanctions. Russia’s invasion of Ukraine caused already high oil and natural gas prices to spike.

Benchmark U.S. crude oil fell $1.30 to $103.80 a barrel in electronic trading on the New York Mercantile Exchange. It gained 48 cents to $105.17 a barrel on Monday.

Brent crude fell $1.25 to $106.33 a barrel.

In currency trading, the dollar was at 129.89 Japanese yen, down from 130.15 yen on Monday. The euro fell from $1.0505 to $1.0544.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Garland K. Long