Asian markets dipped as investors turned their attention to US economic data following Nvidia’s earnings report. The US PCE inflation report is expected to show a slight increase in July, with the Fed likely to begin trimming interest rates in September.
Nvidia, one of several companies that have ridden a wave of enthusiasm over artificial intelligence developments, reported earnings Wednesday.
The results showed a strong profit, but Nvidia stock fell 2.1 per cent, though it is up 153 per cent for the year. The company is one of the most influential stocks on Wall Street, with a total market value topping USD 3 trillion.
Japan’s benchmark Nikkei 225 slipped 0.4 per cent to 38,220.34. Australia’s S&P/ASX 200 declined 0.4 per cent to 8,042.10. South Korea’s Kospi dipped 0.8 per cent to 2,667.65. Hong Kong’s Hang Seng fell 0.5 per cent to 17,608.50, while the Shanghai Composite dropped 0.5 per cent to 2,824.62.
Sentiments remained cautious even after the White House said Beijing and Washington will plan for a phone call in the coming weeks between Chinese President Xi Jinping and US President Joe Biden.
The White House statement said both sides would keep lines of communication open. Worries are growing lately about tensions over Taiwan.
Investors are looking ahead to Friday, when the US government releases its latest data on inflation with the PCE, or personal consumption and expenditures report, for July.
Economists expect the PCE, which is the Federal Reserve’s preferred measure of inflation, to show that inflation edged up to 2.6 per cent in July from 2.5 per cent in June. It was as high as 7.1 per cent in the middle of 2022. The rate of inflation has been easing steadily back toward the central bank’s target of 2 per cent since then, following the Fed’s aggressive interest rate hikes.
Wall Street and the Fed are trying to gauge the resiliency of US consumers amid the squeeze from inflation and high borrowing rates. The central bank is expected to begin trimming its benchmark interest rate back from a two-decade high at its next meeting in September.
Stocks on Wall Street closed lower, as a pullback in big technology companies outweighed gains elsewhere in the market. The S&P 500 fell 0.6 per cent, weighed down by drops in Nvidia, Apple, Microsoft and Amazon.
The Dow Jones Industrial Average, which was coming off two consecutive all-time highs, fell 0.4 per cent. The Nasdaq composite, which is heavily weighted with technology stocks, closed 1.1 per cent lower.
All told, the S&P 500 fell 33.62 points to 5,592.18. The Dow fell 159.08 points to 41,091.42. The Nasdaq fell 198.79 points to 17,556.03.
Treasury yields were mixed in the bond market. The yield on the 10-year Treasury rose to 3.84 per cent from 3.83 per cent on Tuesday.
In energy trading, benchmark US crude rose 16 cents to USD 74.68 a barrel. Brent crude, the international standard, gained 12 cents to USD 78.77 a barrel.
In currency trading, the US dollar rose to 144.52 Japanese yen from 144.44 yen. The euro cost USD 1.1133, up from USD 1.1122.
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