Asian shares were trading mostly lower Tuesday as investors looked ahead to a week that could se e more swings in financial markets, including key reports on U.S. consumer confidence and the job market.
Eyes are also on the U.S. Federal Reserve announcing its next move on interest rates, as well as on the Bank of Japan’s policy meeting.
Japan’s benchmark Nikkei 225 slipped nearly 0.1% in morning trading to 30,672.49. Australia’s S&P/ASX 200 gained nearly 0.3% to 6,789.50. South Korea’s Kospi lost 0.6% to 2,296.93. Hong Kong’s Hang Seng shed 0.9% to 17,257.70, while the Shanghai Composite declined 0.3% to 3,013.24.
On Wall Street, the S&P 500 rose 49.45 points, or 1.2%, to close at 4,166.82. It was the first trading after the benchmark index dropped more than 10% below its high point for the year.
The Dow Jones Industrial Average rose 511.37, or 1.6%, to 32,928.96 points. The Nasdaq composite rose 146.47, or 1.2%, to 12,789.48.
More than 3 out of 4 companies in the S&P 500 have been reporting stronger profit for the latest quarter than Wall Street expected, according to FactSet. With roughly half the reports in, S&P 500 companies appear on track to deliver profit growth for the first time in a year.
Apple will report its latest quarterly results on Thursday. Because it’s the most valuable stock on Wall Street, it is also the most influential stock on the S&P 500. Already, sharp drops for Alphabet and other Big Tech members following their profit reports have shaken the market this reporting season.
Big Tech soared much more than the rest of the market early this year, which helped to lift the S&P 500 but also meant big expectations for continued growth. Those expectations perhaps grew too large.
The second big factor dragging on the stock market since its high point for the year on July 31 has been a sharp run higher in Treasury yields. When bonds are paying higher yields, investors have less appetite for pricey stocks and other investments. They also make borrowing more expensive for everyone from huge corporations to home buyers, which puts the brakes on the economy.
The yield on the 10-year Treasury rose to 4.89% from 4.84% late Friday. It jumped from less than 3.50% during the spring to more than 5% earlier this month, its highest level since 2007. A remarkably resilient economy and other factors have the 10-year Treasury yield catching up to the main interest rate controlled by the Fed, which is above 5.25% and at its highest level since 2001.
The central bank says it will make all its upcoming moves based on what incoming data about the economy and inflation say. That’s why this week could be a shaky one for markets, with many data points that could change officials’ minds.
On Tuesday, the government will release data on employment costs from July through September. Workers have been fighting for higher raises, but the Fed worries that too-high pay increases could give inflation more fuel. Also, The Conference Board will release its consumer confidence index for October.
On Wednesday will come the latest monthly update on the number of job openings across the country. One way the Fed could pull off the delicate balancing act of slowing the economy without creating a recession would be if the number of job openings cools without requiring waves of layoffs.
And then on Friday will come the jobs report for October, which is typically one of the most anticipated pieces of economic data every month.
Through it all will be other updates on the economy and borrowing by the U.S. government, as well as profit reports from roughly 150 companies in the S&P 500, including CVS Health, Pfizer and Starbucks.
A barrel of U.S. crude jumped from less than $70 to more than $93 earlier this month. Oil prices have been shaky since the start of the latest Israel-Hamas war. Traders are still uncertain about whether the fighting will spill into the politics around the region and affect production from Iran or other big suppliers.
Benchmark U.S. crude added 41 cents to $82.72 a barrel. It fell 3.8% Monday to $82.31. Brent crude, the international standard, rose 69 cents to $88.14 per barrel.
In currency trading, the U.S. dollar rose to 149.47 Japanese yen from 149.04 yen. The euro cost $1.0603, down from $1.0619.
___
AP Writers Stan Choe and Damian J. Troise contributed.
___
This version has corrected the day in the first sentence.
