Asian stocks saw mixed performance following a downturn on Wall Street, largely driven by a decline in Nvidia shares. In Japan, the Nikkei 225 ended relatively flat as the government reported a slight increase in the inflation rate for May. Australia’s S&P/ASX 200 edged up, while South Korea’s Kospi and Hong Kong’s Hang Seng experienced losses. On Wall Street, major indices retreated from record highs, with the Nasdaq Composite notably falling due to Nvidia’s 3.5% decline, breaking an eight-week winning streak. While AI-related stocks have been driving market enthusiasm, concerns around a bubble are beginning to emerge.
Despite ongoing worries about inflation and interest rates, Treasury yields rose marginally as mixed economic reports were released. The possibility of a slowdown in the US economy may lead to interest rate cuts by the Federal Reserve, potentially alleviating some pressure on industries affected by high rates. Expectations for Fed rate cuts range from one to multiple reductions, with the 10-year Treasury yield moving slightly higher. In energy markets, oil prices dipped slightly, with benchmark U.S. crude and Brent crude both seeing slight decreases.
Currency markets saw minimal fluctuations, with the US dollar holding steady against the Japanese yen and the euro weakening slightly. Overall, market sentiment remains cautious as investors navigate inflationary pressures and potential policy shifts from central banks. As economic data continues to be released, market participants will closely monitor developments to gauge the future direction of key financial indicators.
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