BANGKOK (AP) — Asian shares slipped Friday after another decline on Wall Street, where hopes for an end to interest rate hikes were again dashed by strong jobs data.
U.S. futures fell and oil prices were higher.
Investors were watching for updates from U.S. Treasury Secretary Janet Yellen’s visit to Beijing, where she was meeting with senior Chinese officials to try to soothe antagonisms over a host of issues and promote global financial stability.
Tokyo’s Nikkei 225 shed 0.6% to 32,593.87 and the Hang Seng in Hong Kong dropped 1% to 18,341.87. The Shanghai Composite index lost 0.4% to 3,194.19, while Australia’s S&P/ASX 200 sank 1.6% to 7,049.30.
India’s Sensex edged 0.1% higher and Bangkok’s SET index also was down 0.1%.
A jobs report Friday will likely have a much bigger impact on Wall Street than anything else this week.
While a sturdy U.S. labor market keeps the economy out of a long-feared recession, it could also push the Federal Reserve to keep interest rates higher for longer in its campaign to defeat high inflation. That in turn could mean more pressure down the line on the economy and financial markets worldwide.
A report from ADP Research Institute suggested hiring by American private employers was much stronger last month than economists expected, with nearly twice as many jobs created than forecast.
The Federal Reserve has raised its federal funds rate by 5 percentage points from virtually zero in the past year, trying to smother the worst inflation in decades by slowing the entire economy.
“As the growth trajectory of the U.S. economy improves, it becomes increasingly more challenging to envision what would cause the Fed to CUT rates anytime soon, as many market participants have been anticipating,” Stephen Innes of SPI Asset Management said in a commentary.
On Thursday, the S&P 500 lost 0.8%, to 4,411.59. The Dow Jones Industrial Average dropped 1.1% to 33,922.26 and the Nasdaq composite gave up 0.8% to 13,679.04.
Friday’s jobs report will likely have a much bigger impact on Wall Street than anything else this week.
Yields jumped in the bond market as traders ramped up bets for the Fed to keep rates higher for longer than previously expected. Hopes for a potential cut to interest rates by early next year diminished.
The yield on the 10-year Treasury rose to 4.04% from 3.94% late Wednesday. It helps set rates for mortgages and other important loans.
The two-year Treasury yield, which moves more on expectations for the Fed, climbed to 4.99% from 4.95%. It’s back to where it was in early March, before the failures of several U.S. banks rattled confidence across financial markets.
On Wall Street, Exxon Mobil was one of the heaviest weights on the market after it tumbled 3.7%.