World News | Asian stocks follow Wall Street lower ahead of U.S. jobs update

BEIJING, March 10 (AP) – Asian stocks followed Wall Street lower on Friday, ahead of the release of U.S. jobs data, on concerns over the possibility of further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney fell. Oil prices edged lower.

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Wall Street’s benchmark S&P 500 fell on Thursday, posting its biggest one-day drop this year, after Federal Reserve Chairman Jerome Powell warned that interest rates could rise faster than expected to cool stubbornly high inflation.

Traders focused on U.S. government hiring data on Friday after other indicators showed the job market remains strong despite multiple rate hikes. That’s good for workers, but Fed officials worry that rising wages could stoke inflation, which could lead to more rate hikes to cool business activity and hiring.

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Rubeela Farooqi of High Frequency Economics said in a note that Fed officials are “clearly signaling that rates are going to go higher.”

The Shanghai Composite fell 0.9 percent to 3,246.16, while Tokyo’s Nikkei 225 fell 1.2 percent to 28,291.89. Hong Kong’s Hang Seng fell 2.4 percent to 19,460.27 points.

Seoul’s Kospi fell 1.3 percent to 2,388.58 and Sydney’s S&P-ASX 200 lost 1.8 percent to 7,181.00.

Markets in New Zealand and Southeast Asia fell.

On Wall Street, the S&P 500 fell 1.9% to 3,918.32, further paring gains made earlier in the year. About 95% of the companies in the benchmark index fell.

SVB Financial Group lost 60% of its value after announcing plans to raise up to $1.75 billion to bolster its finances amid concerns over rising interest rates and the economy. Major banks such as Bank of America and Citigroup fell sharply.

The Dow Jones Industrial Average fell 1.7% to 32,254.86. The Nasdaq Composite fell 2.1 percent to 11,338.35.

Powell said earlier this week that the Fed was prepared to hike rates more aggressively if necessary. That fueled concerns that the Federal Reserve and other central banks could push the global economy into at least a brief recession to curb inflation.

A government report on Thursday showed the number of Americans filing for unemployment benefits rose by the most in five months last week, but layoffs were few.

The yield on the two-year U.S. Treasury note, which tends to track expectations for future Fed actions, fell to 4.87% from about 5.05% ahead of the jobless report. It has been hovering at its highest level in 16 years.

A report on Wednesday showed the number of job vacancies posted nationwide last month was higher than economists had expected.

Traders expect the Fed to raise its benchmark lending rate by an unusually large 0.5 percentage point at its March 22 meeting. That was 0.25 percentage point higher than Powell’s forecast ahead of comments this week, according to CME Group.

US inflation edged up to 5.4% in January, well above the Fed’s 2% target. The central bank has already raised its key interest rate to 4.50% to 4.75% from near zero in early 2022, the fastest hike in decades.

The company has been cautious about its outlook for 2023.

General Motors shares fell 4.9 percent after the automaker joined a long list of companies planning to cut jobs amid recession fears. Many companies are coming out of a weak fourth quarter.

Economists expect profits to fall into the first half of 2023.

JPMorgan shares fell 5.4% after the bank sued its former executive Jess Staley, accusing him of helping to cover up Jeffrey Epstein’s years of sexual abuse and human trafficking in an effort to keep the financier client.

In energy markets, benchmark U.S. crude fell 41 cents to $75.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 94 cents to $75.72 in the previous session. Brent crude, the price basis for international oil trades, fell 33 cents to $81.26 a barrel in London. It fell $1.07 to $81.59 in the previous session.

The dollar rose to 136.57 yen from 136.17 yen on Thursday. The euro rose to $1.0592 from $1.0578. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)