BEIJING (AP) – Asian stocks followed a fall on Wall Street ahead of US inflation data on Wednesday, which traders feared upward pressure on prices was still too strong for the Federal Reserve to ease rate hikes.
Shanghai, Tokyo, Hong Kong and Seoul declined. Oil prices fell slightly.
Wall Street’s benchmark S&P 500 index fell 0.4% on Tuesday, marking its fourth daily decline after disappointing earnings reports.
Data on Wednesday is expected to show that US headline inflation eased in July from a four-decade high of 9.1% in the previous month. However, according to a FactSet survey, traders expect core inflation, which eliminates volatile groceries and energy and leaves rents and other costs behind, to pick up slightly. And this despite other data pointing to an economic slowdown.
Anything above 8% is “still too high” for the Fed, Mizuho Bank’s Tan Boon Heng said in a report.
“The fight against inflation is far from over,” Tan said.
The Shanghai Composite Index slipped 0.6% to 3,227.98 and Tokyo’s Nikkei 225 fell 0.7% to 27,803.26. Hong Kong’s Hang Seng fell 2.2% to 19,559.33 points.
Seoul’s Kospi fell 0.9% to 2,480.20 and Sydney’s S&P ASX 200 fell 0.3% to 7,005.70.
The Indian Sensex opened less than 0.1% lower at 58,827.86. The markets of New Zealand and Southeast Asia declined.
Investors worry that efforts by the Fed and other central banks in Europe and Asia to cool inflation, which is at multi-decade highs, could hurt global economic growth.
On Wall Street, the S&P 500 fell to 4,122.47 as traders waited for more evidence of how aggressively the Fed could be pushing for more rate hikes.
The Fed has hiked rates four times this year, twice by 0.75 percentage points, three times its usual range. Investors are expecting a further 0.75 percentage point rise in September after last week’s data showed that hiring was stronger than expected.
Fed officials concede that the US economy could slip into recession, but some point to a strong labor market as evidence it can tolerate further rate hikes.
The Dow fell 0.2% to close at 32,774.41. The Nasdaq fell 1.2% to 12,493.93. The Russell 2000 closed down 1.5% at 1,912.89.
Chipmaker Micron Technology fell 3.7% after warning investors that earnings could fall short of expectations due to weaker demand. The warning hit other chipmakers hard, with Nvidia down 4%.
Norwegian Cruise Line plunged 10.6%, the biggest drop in the S&P 500, after reporting disappointing results and a weak revenue forecast. Expedia fell 1.6% and American Airlines fell 2.7%.
Markets were also rocked by Russia’s war in Ukraine, which has sent prices of oil, wheat and other commodities soaring, and uncertainty about China’s anti-virus measures, which have disrupted production and trade.
In energy markets, U.S. crude oil, the benchmark in electronic trading on the New York Mercantile Exchange, lost 65 cents to $89.85 a barrel. The contract was down 26 cents on Tuesday at $90.50. Brent crude, the benchmark for international trading, fell 54 cents to $95.77 a barrel in London. In the previous session, it fell 34 cents to $96.31.
The dollar fell to 134.96 yen from 135.18 yen on Tuesday. The euro rose to $1.0217 from $1.0205.