HONG KONG (news agencies) — European stocks dropped in early trading and Asian markets were mostly lower on Wednesday after U.S. stocks hit new record highs.
The future for the Dow Jones Industrial Average and that for the S&P 500 both edged 0.1% lower.
Britain’s FTSE 100 fell 0.5% to 8,377.95 after the Office for National Statistics announced a stronger-than-expected inflation reading that dashed hopes for a rate cut in June. Inflation fell to 2.3% in April, down from 3.2% in March. But it remained above the Bank of England’s 2% target.
France’s CAC 40 lost 0.4% in early trading to 8,107.40, while Germany’s DAX declined 0.2% to 18,686.15.
In Asia, Tokyo’s Nikkei 225 fell 0.9% to 38,617.10 after Japan reported that its trade deficit rose last month as rising costs for imports outpaced an 8% rise in exports from the year before. The data were weaker than analysts had forecast.
Hong Kong’s Hang Seng index lost 0.2% to 19,184.85, while the Shanghai Composite index was nearly unchanged at 3,158.54.
In South Korea, the Kospi was virtually unchanged at 2,723.46. Australia’s S&P/ASX 200 edged 0.1% lower to 7,848.10.
Taiwan’s Taiex gained 1.5% as shares in market heavyweight Taiwan Semiconductor Manufacturing Corp. jumped 2.7%.
Markets in Thailand were closed for a holiday.
On Tuesday, the S&P 500 rose 0.3% to 5,321.41 and surpassed its record set last week. The Nasdaq composite gained 0.2% to 16,832.62, a day after setting its latest all-time high. The Dow Jones Industrial Average climbed 0.2% to 39,872.99 and is sitting just below its high set last week.
Indexes have risen to records recently largely on expectations the Federal Reserve will cut interest rates later this year as inflation cools. More reports showing big U.S. companies earning fatter profits than expected have also boosted the market.
Rates for mortgages, credit cards and other payments have become more expensive because the Federal Reserve has been keeping its main interest rate at the highest level in more than two decades. It’s trying to pull off a tightrope walk where it grinds down on the economy just enough through high interest rates to snuff out high inflation but not so much that it causes a painful recession.
This week doesn’t have many top-tier economic reports, and the biggest potential for sharp moves in the market will likely come from profit reports.
The week’s headliner is Nvidia, whose stock has rocketed higher amid a frenzy around artificial-intelligence technology. It will report its latest quarterly results on Wednesday, and expectations are high.
Target also reports later in the day with Ross Stores following Thursday. They could offer more details on how well spending by U.S. households is holding up. Pressure has been rising on them amid still-high inflation, and it seems to be the highest on the lowest-income customers.
Benchmark U.S. crude fell $1.04 to $77.62 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, declined $1.25 to $81.63 a barrel.
The U.S. dollar rose to 156.42 Japanese yen from 156.16 yen. The euro cost $1.0857, up from $1.0854.
American Dollar Exchange Rate