Asian stocks have gone down because investors are worried about the possibility of a slowdown in the world economy. This is because Wall Street’s performance has been very unstable.
The Nikkei 225 index in Tokyo was down 2.2% on Wednesday, closing at 25,984.51. The Kospi index in Seoul dropped 2.8%, closing at 2,161.86. The S&P/ASX 200 index in Sydney fell 0.8% to 6,443.30.
The Hang Seng Index in Hong Kong fell 2.1% to 17,483.89, while the Shanghai Composite Index was down 0.8% to 3,068.59. The benchmark in Taiwan fell by 2.1%.
The Dow Jones Industrial Average joined other major US indices in entering a bear market at the start of the week. This means that it has dropped more than 20% from its high in January.
On Tuesday, the S&P 500 index fell for the sixth consecutive day, falling 0.2% to 3,647.29.The Dow Jones Industrial Average ended the day down 0.4% at 29,134.99, while the Nasdaq Composite added 0.2% to end at 10,829.50.
When compared to the market as a whole, small-cap companies performed better. Gains of 0.4% saw the Russell 2000 end at 1,662.51.
A prolonged downturn in the major indices continues. There are only a few trading days left in September, and it looks like stock prices will go down again. Investors are worried that the higher interest rates used to fight inflation will cause the economy to go into a recession.
The S&P 500 has been in a bear market since June, when it fell more than 20% from its all-time high set on January 4, and is down about 8% this month.After falling on Monday, the Dow joined the benchmark index and the tech-heavy Nasdaq in the same group of declining indices.
The world’s central banks have been increasing interest rates to make borrowing more costly and slow the fastest inflation in decades. Last week, the Federal Reserve continued its aggressive rate-hiking policy, which impacts a wide range of consumer and commercial loans. It has leveled off at 3.25 percent to 3 percent.As the year began, it was at an all-time low of almost nothing.
The Fed has also made a prediction that says its benchmark rate might be 4.4% by the end of the year. This is a full percentage point higher than what it thought it would be in June.
The financial markets are concerned that the Federal Reserve will push the economy into recession by applying too much pressure on the brakes. Stocks, particularly those of more expensive technology firms, have been feeling the effects of the recent increase in interest rates as investors become less optimistic about the market as a whole.
As US oil prices increased by 2.3%, energy equities performed well. The price of Exxon Mobil gained 2.1%.
On Tuesday, bond rates rose generally. The 2-year Treasury yield declined from 4.34 percent at Monday night’s close to 4.31 percent today, indicating a downward trend in market participants’ expectations for future Federal Reserve policy. The price is now higher than it was in 2007. Mortgage rates are affected by the yield on the 10-year Treasury note, which increased to 3.98 percent from 3.93 percent.
In order to gauge how businesses are handling inflation, investors will be keeping a careful eye on the next wave of corporate profits. In early October, companies will start sharing their most recent quarterly results.
High levels of consumer optimism persist despite widespread price increases across all consumer goods. Economists were surprised by what The Conference Board said about consumer confidence in September.
On Thursday, the government will disclose the latest data on second-quarter GDP and the weekly report on unemployment benefits. The government will release a new report on personal income and spending on Friday. The report will give more information about how inflation affects consumers’ spending money.